Cause of collapse



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In general when we say that today is the time of recession do we mean that American financial institutions are collapsing because their net worth is dipping into a negative figure?

2 Answer(s)


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This video gives you a good idea on why the recession happened -

http://www.youtube.com/watch?v=BO_JXFZhdsQ



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Basically recession is not due to a single factor. It is generally an outcome of a small loophole in the economic policies implemented by the banks in the long run. In the recent case it was caused mainly due to real estate that was due to the low interest rates for home loans provided by banks.