2008 recession causes, result, impact''.

Causes:

1. Housing Bubble: The 2008 recession was triggered by the burst of the United States housing bubble, where housing prices had been artificially inflated, leading to a collapse in the housing market.
2. Subprime Mortgage Crisis: Financial institutions issued subprime mortgages to borrowers with poor credit, and these risky loans became a significant factor in the crisis as many borrowers defaulted on their payments.
3. Securitization: Banks bundled these risky mortgages into complex financial products known as mortgage-backed securities, which were then sold to investors. When the underlying mortgages defaulted, the value of these securities plummeted.
4. Deterioration of Credit Markets: The widespread default of subprime mortgages resulted in a loss of confidence in financial institutions, causing a freeze in credit markets as banks became hesitant to lend to each other.
5. Lehman Brothers' Collapse: The bankruptcy of Lehman Brothers in September 2008 intensified the crisis, causing panic in financial markets and triggering a domino effect of bank failures and economic downturn.
6. Global Financial Interconnectedness: The interconnectedness of global financial markets exacerbated the crisis, as the impact of the U.S. housing market collapse spread to other economies through various financial instruments.
7. Lack of Regulation: Regulatory oversight of financial institutions was insufficient, allowing risky lending practices and the proliferation of complex financial products without adequate scrutiny.
8. Consumer Confidence Decline: The collapse of the housing market, coupled with the broader financial crisis, led to a decline in consumer confidence, causing a reduction in spending and further contributing to the economic downturn.

Result:

1. Global Financial Crisis: The 2008 recession originated in the United States with the collapse of the housing market, leading to a global financial crisis. Financial institutions faced severe losses, triggering a domino effect worldwide.
2. Bank Failures: Many major banks faced insolvency, necessitating government interventions to prevent widespread collapse. Lehman Brothers' bankruptcy in September 2008 marked a significant event, intensifying the crisis.
3. Stock Market Decline: Stock markets globally experienced sharp declines, eroding trillions of dollars in market value. Investors faced significant losses, impacting individual savings, retirement funds, and institutional portfolios.
4. Housing Market Collapse: The recession was rooted in the subprime mortgage crisis, causing a sharp decline in housing prices. Many homeowners faced foreclosure, contributing to the overall economic downturn.
5. Unemployment Surge: The economic downturn led to widespread job losses as companies struggled to stay afloat. Unemployment rates rose significantly, causing financial hardships for individuals and families.
6. Government Bailouts: Governments intervened with massive bailout packages to stabilize financial institutions deemed "too big to fail." This approach sparked debates on the role of government in the economy and the moral hazard of rescuing failing institutions.
7. Consumer and Business Confidence Decline: With uncertainty prevailing, consumer spending and business investments declined. This lack of confidence further amplified the economic downturn, prolonging the recovery period.
8. Aftershocks in Other Sectors: The recession had cascading effects on various industries, including automotive, manufacturing, and retail. Many businesses faced challenges in securing credit, leading to bankruptcies and restructuring efforts across sectors.

Impact :

1. Housing Bubble Burst: The 2008 recession was triggered by the collapse of the housing market bubble in the United States, as subprime mortgage defaults surged, leading to a financial crisis.
2. Financial Institution Failures: Major financial institutions faced insolvency due to exposure to high-risk mortgage-backed securities, causing a domino effect in the banking sector.
3. Credit Freeze: The crisis led to a credit freeze, making it difficult for businesses and consumers to obtain loans, which negatively impacted economic activities.
4. Global Impact: The recession had a global reach, affecting economies worldwide, as interconnected financial markets transmitted the shock internationally.
5. Unemployment Surge: Job losses soared as companies faced financial stress, cut costs, and reduced workforce, contributing to a spike in unemployment rates.
6. Government Interventions: Governments implemented massive bailouts and stimulus packages to stabilize financial markets and prevent further economic downturn.
7. Stock Market Crash: Stock markets experienced significant declines, with major indices plummeting, eroding wealth and confidence in financial markets.
8. Long-Term Economic Impact: The recession left a lasting impact on economic growth, with slow recovery and persistent challenges such as high levels of public debt and cautious consumer spending.