winners and losers in great recession
Compare and Contrast the “Winners and Losers” of the Great Recession
Lehman Brothers went bankrupt; Merrill Lynch was merged; AIG needed a large amount of money to get rid of financial difficulties. When the Great Recession broke out in 2008, it shocked the whole world and made everyone feel insecure. It seemingly was caused by sub prime mortgage crisis, but the underlying reason was that the U.S. government had severe problems in financial orders and development imbalances. Five years later, the world economy is still struggling to move on. The vast majority of ordinary people experienced a stock price plummet, bank failures, business closures, layoffs and other life nightmares. For them, these five years are cold winters. But there are also some “big guys” holding the faith “not to waste any of the crisis” by taking advantage of low interest rates to make a lot of money and standing in the winner’s position. Although the winners and the losers in this crisis all suffered from it, their differences are due to situations, wealth levels and relationships.
Banks and depositors are definitely the big winners and losers in this financial crisis. The Federal Reserve plays a vital role between them because of the interest rate. Although they are both related to the Federal Reserve, banks were saved but depositors suffered a lot. The situations they were in are opposite. “It's no accident that the banks have prospered mightily since the crash”, said Neil Barofsky, who was the watchdog over the U.S. bank bailout program launched in September 2008. Undoubtedly the great savior of banks is the Fed Chairman Ben Bernanke. Since he implemented the ultra-low interest rate at the end of 2008, the Fed has cut the monetary cost for the bankers. When the deposit profit is far below the profit of loan and investment, banks have successfully given the opportunity of turnaround. However, “U.S. banks have at least 4% interest rate for one-year deposit before the crisis, now it is
Lehman Brothers went bankrupt; Merrill Lynch was merged; AIG needed a large amount of money to get rid of financial difficulties. When the Great Recession broke out in 2008, it shocked the whole world and made everyone feel insecure. It seemingly was caused by sub prime mortgage crisis, but the underlying reason was that the U.S. government had severe problems in financial orders and development imbalances. Five years later, the world economy is still struggling to move on. The vast majority of ordinary people experienced a stock price plummet, bank failures, business closures, layoffs and other life nightmares. For them, these five years are cold winters. But there are also some “big guys” holding the faith “not to waste any of the crisis” by taking advantage of low interest rates to make a lot of money and standing in the winner’s position. Although the winners and the losers in this crisis all suffered from it, their differences are due to situations, wealth levels and relationships.
Banks and depositors are definitely the big winners and losers in this financial crisis. The Federal Reserve plays a vital role between them because of the interest rate. Although they are both related to the Federal Reserve, banks were saved but depositors suffered a lot. The situations they were in are opposite. “It's no accident that the banks have prospered mightily since the crash”, said Neil Barofsky, who was the watchdog over the U.S. bank bailout program launched in September 2008. Undoubtedly the great savior of banks is the Fed Chairman Ben Bernanke. Since he implemented the ultra-low interest rate at the end of 2008, the Fed has cut the monetary cost for the bankers. When the deposit profit is far below the profit of loan and investment, banks have successfully given the opportunity of turnaround. However, “U.S. banks have at least 4% interest rate for one-year deposit before the crisis, now it is