THE ALMOST GREAT DEPRESSION , 2008

 September 15, 2008 , A lovely morning in USA . Everybody was heading toward their office but what they see is cardboard box in their desk . Nobody knew that they will be jobless in a single day , The reason for this is Lehman  Brothers(one of the largest investment banks in the world at that time)collapse . Let's go through the background of this story.

Few year back from this incident America was going through the trend -A trend of buying houses . As per the American thinking  that house were the safest investment which will never go down and somehow they were right but who knows they were wrong . So in order to obtain these houses they were taking a huge amount of loans and in other hand banks were also providing these loans at lower interest rate . the mortgages were given to every individual irrespective of their income level , bad debt history , poor saving ,ETC 

The banks were trying to play smart at this situation and bunddled these mortgages into the investments and sold them to the investors which is also called DEBT SECURITIZATION . this process of taking loan was at it's high . People were buying one after another homes thinking that the price will never fall but who knows they were wrong and the day came in which the house prices were falling down rapidly which means the debtors were not able to make a payment of their loan and suddenly a panic has been started in the mind of the investors who invested in the mortgages . They were in dilemma which bank is trustworthy , This panic created a shortage of money as the investors were trying to pull their money from the banks . 

Banks were in a huge trouble , In one hand the debtors were not able to make payment and on other hand the investors were pulling their money from the bank . It was sure that this panic could cause a huge damage in the banking system and it has eventually happened . One of the biggest bank of the US Lehman Brothers filed for bankruptcy on September 15, 2008 . hen the largest bankruptcy in U.S. history. Employees carried their belongings out in boxes. The stock market crashed .This wasn't just America's problem anymore, European banks had bought the same investments, Asian markets crashed, Global trade slowed, Factories closed, Businesses failed, Families everywhere felt the consequences.

The government at last saves the day through Troubled Asset Relief Program of $700 Billion and central bank plugged trillions of dollars.