What were the components Of The 2008 Bubble?

Modified on Mon, 18 Jun 2018 at 02:40 PM

In 2007 the U.S. was in the midst of an economic boom. The dotcom bubble was a distant memory, unemployment had reached a decade-low of 4.4%, and sentiment among investors was high. However, what most investors didn't realize was that their rapidly rising house price, and surging equity portfolio was about to hit a brick wall. 

Asset bubbles and financial crises were not a new phenomenon. Going back to the British Railway Mania Bubble of the 1840s, bubbles are a period of over-exuberance in the economic prospects of a particular asset class, and 2008 was no different. As historians recount the Great Recession of 2008 that put hundreds of thousands of people out of work and wiped trillions of dollars off global equity markets, there is more than just surging asset prices and investor greed that played a role in the demise of the global economy in 2008. (See also: Economic Meltdowns: Let Them Burn Or Stamp Them Out?)

Source : Investopedia

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