Why did the stock market crash in 2008?

Help on current economic crisis and stock market crash of 2008 questions?

  • How have each of the following topics contributed to the stock market crash of 2008 and the subsequent financial crisis and recession? The Gramm-Leach-Bliley Act of 1999 Housing Bubble Short Selling Buying on Margin Subprime/adjustable rate mortgages Thank you!

  • Answer:

    The GLB Act repealed the Glass-Steagall Act of 1932 and allowed commercial banks to behave like investment banks. Teh Housing Bubble started in 2007 when those who couldn't afford mortgages were given adjustable rate mortgage ARM and eventually foreclosed. Short Selling is a Wall Street technique to take advantage of a stock going down and it's a bet that stocks would go down further Buying on a margin I think is a hedge bet Subprime/adjustable rates change if the mortgage taker fails to pay on time.

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