The Great Recession

The housing bubble, subprime lending, increasing rates and growing defaults, securitization, financial upheaval, and oil prices are some of the causes of the Great Recession. Housing prices rose then dropped, owing primarily to the subprime mortgage crisis. The banks then plunged into crisis because house prices were falling and mortgage-backed securities were plainly no longer the solid gold investment they had looked to be, so banks stopped lending to one other out of fear of being trapped with subprime mortgages as collateral.