Housing
These were home loans given to people who couldn’t really afford them
Subprime loans
This big bank went bankrupt in 2008 and made everything worse
Lehman Brothers
The program where the government gave money to banks
TARP
Home prices started to do this instead of going up
Crash
A lot of people lost these
Jobs
When house prices kept going up and people thought it would never stop
Housing Bubble
These were bundles of a lot of home loans sold to investors
Mortgage-backed securities
The Government lowered this to try to help the economy
Interest rates
Big banks thought the government would save them
To big to fail
People lost their houses because of this
Foreclosure
Home loans that started cheap but later became way more expensive
Adjustable rate mortgages
These were used to bet on whether loans would fail
Credit default swaps
The president when the crisis started
George W. Bush
There weren’t enough rules for banks
Deregulation
When the economy slows down and businesses struggle
Recession
Loans given without checking income or credit were called these
NINJA loans
This stock market number dropped a lot in 2008
Dow Jones
A law made to stop banks from doing risky stuff again
Dodd-Frank
People borrowed way more money than they could pay back
Excessive borrowing
This happened in many countries, not just the U.S
Global recession
When banks sold home loans to other companies instead of keeping them
Securitization
This rating made risky investments look safe.
AAA rating
Two mortgage companies the government took over
Fannie Mae and Freddie Mac
Banks didn’t care if loans were risky because they sold them
Moral Hazard
The government spent a lot of money and went into these
Debts