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Bursting of the Dot.com, or Technology Bubble
Entrepreneurs saw potential in online business. Investors got rich off unprofitable stock, because they earned more from them. Software companies traded a lot and made a lot of money. In April, inflation bubble of investment burst causing investment losses. -
Enron, the Emergence of Corporate Fraud and Corporate Governance
Enron =top energy company. Arthur Anderson = Accounting firm. They were caught in corporate fraud scandal, leading to bankruptcy of Enron and dissolution of Arthur Anderson.Enron hid debt from shareholders etc. Told auditors to ignore issues. Shareholders lost over 60 billion dollars. -
2001-2003-present War of Terror
War on terror in Afghanistan. War of Terror in 2001. Iraq war 2003. Cost of these wars is ongoing. 944 billion dollars was supposedly approved for the operations over there. (Incredible financial drain on economy.) -
September 11 Terrorist Attacks
The terrorist attacks shaped other financial events of the decade. The economic climate was the same and it was the third time in history that the New York stock exchange was shut down (September 10-17). Economic loss is underestimated. Over 60 billion in insurance losses alone. Created department of homeland security. -
Stock Market Crash
After 9/11 it started sliding again. Market reached lows unseen since 1997 and 1998. Corporate fraud scandals (Enron etc. ) contributed to this crash. -
China and India grow as world financial powers
Rise of China and India. Grow from 7-8% for decades to come. China has grown about 9.6% over the past two decades. Together, they account for 1/3 of the worlds population. Many workers here and business. -
Hurricane Katrina and Rita
Katrina- Gulf Coast of U.S. biggest natural disaster in U.S. History. Almost destroyed New Orleans.
Rita- followed.
between the two more than 200 billion dollars in damage done. 400,000 jobs lost. 275,000 homes destroyed.
Many displaced, killed and missing. Effect on oil and gas prices was long lasting. -
07-08 Sub-Prime Housing Crisis and Housing Bubble.
U.S. housing market was good. Earlier. But sub-prime lending arose. This was sketchy because anyone could qualify to buy a house. Low or no down-payment and low initial interest was approved. Banks made mortgage loans and as interest rates for loans rose they could not make their mortgage payments. -
07-09 Global Recession and Collapse of Wall Street
Spetember. Great investment banks on wall street started collapsing due to sub-prime mortgage crisis and corporate fraud. At the end of 2009 it was looking better. -
Housing Crisis
About 10 million homeowners lost their homes during sub-prime mortgage crisis. Housing prices fell. Interest rates were raised. Home owners had adjustable mortgage rates followed fed fund rates and reset the first few years. Higher payments. Couldn't sell their houses. Banks foreclosed, forced them to leave their homes. Government programs failed. -
Bernard Madoff and the Big Ponzi Scheme
Bernard Madoff owned own investment advisory. Admitted to running own Ponzi scheme. (where he paid investors with proceeds from investments of other clients.)
One of largest fraud on wall street. Defrauded investors around 18 billion. Sentenced to 150 years in prison. -
Global Banking System Stopped Working
Lehman Brothers announced bankruptcy. Refused government protection. Global bankers panicked, leading to the great recession. Wednesday, September 17, banks withdrew $160 billion from ultra-safe money market accounts. Banks were hoarding money. They had $190 billion versus the $200 billion they should have had. There was a credit freeze which led to a crash. Interest rates were lowered to zero. Continued hoarding cash to write down foreclosures. -
Stock Market Crash 2.0
Septeber 9, 2008 Dow Jones Industrial average fell 777 points. From October 2007 to March 2009 it dropped fifty percent. This was the worst decline since the Great Depression, when it fell 80 percent. But it occurred in only 17 months. -
Billions in Bailouts
Hank Paulson and Ben Bernarke asked the Congress for a bailout package. It was supposed to be bought to purchase toxic mortgage from banks. $700 billion. The treasury used it wrong. This made many places go bankrupt. (American International Group). It caused the economy to not grow. -
Japan's Tsunami and Nuclear Disaster
March 11, 2011 a large tsunami hit Japan. It was 9.0 magnitude earthquake and 100 foot high tsunami. About 28,000 people died and 465,000 displaced. Waves damaged Fukushima which is a nuclear power plant. It devastated nuclear industry here and it slowed the global economy. -
Obamacare Adds Coverage for 20 Million
Expanded health coverage to 20 million people. They could receive low-cost preventive care for chronic illness. Kept them out of emergency rooms. Resulted in rise in health care cost. -
China Emerges as the World's Largest Economy
Largest Economy. Shift economic power. Largest holder of U.S. debt, China is. It owns $1.2 billion of the worlds treasuries, giving them leverage. I.e. China threatened to cell its part of the Congressional pressure to raise the value of the yuan continued. -
Greek Debt Crisis
Defaulted on its debt. It triggered the Eurozone debt crisis. IT was resolved, but it threw into question European Union. -
Hurricane Harvey
Category four storm. It caused $180 billion in damage. That's more than any other natural disaster. Affected 13 million people. -
Cost of War on Terror Escalates U.S. Debt
9/11 attack led to increased defense spending in Afghanistan and Iraq. War on Terror increased $600-$700 per year creating a budget deficit of $500 billion per year. By 2007 it had doubled to $9.2 trillion, and by 2018 it added $2 trillion to that debt.