investmentyoo

Investment History Episode 15: The 2000s Housing Bubble and Financial Engineering, How Was the 2008 Global Financial Crisis Created? After the dot-com bubble collapsed in 2000, American investors experienced how excessive expectations for technology stocks could turn into enormous losses. Share prices plunged across the Nasdaq, and many internet companies that had failed to generate profits disappeared once access to capital was cut off. The stock-market decline weakened investor confidence and placed additional pressure on corporate investment and employment. The U.S. economy then faced a slowdown and the shock of terrorist attacks, prompting the Federal Reserve to lower interest rates in an effort to support economic activity. Lower rates encouraged borrowing and consumption, while capital disappointed by the stock market began flowing toward housing, which appeared safer and more tangible. Many people believed that nationwide home prices rarely declined sharply and that houses were ...