The Inside Job - The Movie Essays Example

The year 2008 marked a massive economic catastrophe that hit the US since the End of the Depression that the world experienced in the 1930’s. This economic meltdown began in 2007 when the prices of homes in the United States began to fall and this quickly spread to other financial markets overseas. Before the Economic crisis began, the price of owning a home was way beyond the reach of many Americans. This was characterized by high mortgage interest rates that persisted in the United States prior to the Economic meltdown of 2008. Before the start of the economic meltdown, the Wall Street-listed mortgage companies had experienced high default of the mortgages repayment as people would not take loans to cover their debts which had skyrocketed. This is an essay that analyses the status of Wall Street during and before the Economic Crisis of 2008.
The economic crisis that started initially from the varied housing firms quickly spread to investment banking industry, insurance companies, savings and loan companies and commercial banks. This was in addition to the auto industry which had to be bailed out by the federal government due to crisis in cash flows. When mortgage prices were high, all the other related industries were profitable. The profit index and the rate of return were high for investors.
However, with the unfolding of the economic crisis, every company began to experience losses. Prices began to have a down word spiral with loans being defaulted, insurance companies paying large premiums for the companies that crumbled. Giant companies that had stock on Wall Street had their stock loose value. Investors lost confidence in the current stock they held with the companies and began to sell it in panic. This caused pressure on the financial market where securities were sold at loss with lower prices.