Decisions in the New Economy (The Great Recession) – What Would I Do?
What would I do? People in America seem to be worried about a possible permanent shift in the economy that occurred in 2008 with a series of cascading events. A perfect storm of easy credit, the housing boom, commodity speculation (mainly oil), and shady banking practices led to some disastrous events – Events of 2008 • Crash of investment bank Bear Stearns (13 March). • Fall of Fannie Mae and Freddie Mac (7 September). • Bank of America’s acquisition of Merrill Lynch for $50 billion (14 September). • Lehman Brothers filing for Chapter 11 bankruptcy (15 September). • American International Group’s liquidity crisis. AIG’s shares lost 95% of their value and the company reported a $13.2 billion loss (16 September). • The bailout of the U.S. financial system (The Emergency Economic Stabilization Act of 2008). President Bush signed the bill into law within hours of its congressional enactment on 3 October, creating a $700 billion Troubled Assets Relief Program (TARP) to purchase failing ban
