Financial Crisis 2008
The world economy in 2007 began with high expectations; therefore the United States President George Bush decided to apply for a mortgage plan for insoluble people, those whocould not afford the huge debts of their homes. Also, people who had mortgage debt took the decision of refinance. When the time came to make the payment, people did not have sufficient resources SoThey Had to leverage themselves to hilt and pay them. There were many indicators showing a possible crisis, that’s why the banks took extreme measures against What Came To Be Called "toxic mortgage."One consequence of this problem was the distrust between banks, because some loans they made to others, which in the long term became something non-profitable for them, since they were for mortgageloans, which had little chance to be reimbursed.
This crisis was like a cancer crisis. It started infecting the U.S. financial system and then affected the global economy. When the government wantedto take quick action in early 2008 to remedy this situation, it decreased the interest rate on loans to give people the opportunity to pay their debts and injected liquid money to banks as a form ofincentive, but it was too late. Confidence between the banks was destroyed because of the already existing problem. The crisis became more dangerous to U.S. economy when the two largest mortgagecompanies in the country, Freddie Mac and Frannie Mae, began to see its shares under attack by pessimistic speculators, so in early July, the U.S. government and Federal Reserve had to announce a bailoutfor these financial.
During 2008 the Latin American governments showed concern for the financial crisis that was happening in the United States. In fact, some foreign functionaries worked togetherwith American bureaucrats to carry out simulating politics of financial assistance. The economical data of this years showed that the Hispanic countries had some common characteristics: first, most...
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