What went wrong?

>>1924512
People borrowed to their very limit, which is normal.

Boosh invaded Iraq driving up gas prices and tipping people over their limit.

mass bankruptcy ensued, first personal and then corporate.

>>1924512
The US economy is on the foundations of average consumers buying homes and inevitably paying for them.
People stopped paying their mortgages, and the economy failed. Chief executive branch at the time exploited this opportunity to get rich. Tax payers bailed out the shitty situation. People died. The end?

>>1924512

Lack of regulation

>>1924512
Do you mean before or after?

Before:
Banks made loans to people who couldn't pay it back.
Corrupt credit ratings agencies misvalued credit default swaps.
Banks lost a lot of money.
Governments bailed them out to prevent a panic.

After:
Banks were too reluctant to lend.
People were reluctant to borrow because of uncertainty about their future.
Governments could have solved the problem by borrowing much munch much more, but instead they tried to limit their borrowing because they, and most of the public, thought that was the responsible course of action.
Therefore the recovery has been very slow.

>>1924512
Lack of confidence in bank of united states caused a run on banks, this spread to other banks, banks couldn't return deposits, money supply cut by like a third or something, the Fed doesnt do what they are supposed to and supply money to failing banks, something something gold britain america etc etc

glass stegal repwal by Clinton

>>1924512
Synthetic CDO's aka voodoo banking.

>>1924847
Now that literally no one can buy a home anymore what is the flimsly US "Economy" built on now?

>>1924512
Fed raised rates to combat inflation that housing boom created. Credit was crunched so hard and banks were so leveraged that leveled housing prices led to a fire sale and liquidity problems.

>>1926052
This, plus the Fed declined to intervene in the housing bubble they saw forming in 2005.

>>1926038
Fruit ninja smartphone apps

>>1926171
That's not very confidence inspiring...