Blog #11

Blog 11

Nick Mitterando

This week in the Nations textbook it discussed the crash of 2008 and 2010. The crash of 2008 was the biggest since the great depression and resulted in thousands of Americans losing jobs and struggling with money. The crash happened because too many people took out loans they could not afford. When it came time to pay the loans the people couldn’t, and the banks ran low on money because of this. This also ran house prices up extremely high and people could not afford them. The 2008 stock market crash destroyed 16.4 trillion dollars of people’s households’ net worth. The crash was caused by a bubble popping. This bubble was the housing bubble, many people saw real estate as profitable and invested in it. Then when it got to big it popped and the crash happened.

In 2010 there was another crash known as the flash crash. It only lasted 36 minutes. On May 6, 2010, the stock market opened, and Dow Jones was down, it then stayed that way for most of the day because of worries about the debt crisis in Greece. It then bounced back very quickly and righted itself by the end of the day. This was a very different crash than ones in the past because of how quick it was. Stock still dropped a huge amount like other crashes but it lasted only a fraction of the time.