Sunus Teknikleri
description
Transcript of Sunus Teknikleri
![Page 1: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/1.jpg)
GREAT DEPRESSION AND SUBPRIME MORTGAGE CRISIS
SEHER HAKAN
![Page 2: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/2.jpg)
CONTENT
How Great Depression started? Causes of Great Depression Causes of Subprime Mortgage Crisis How Crisis Spread All Over The World Basic Differences Conclusion
![Page 3: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/3.jpg)
How Great Depression Started?
Black Thursday on 24th of October 1929 Started with Great Crash of Stock Market
![Page 4: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/4.jpg)
Numbers of Crisis
Real GDP fell 30% Industrial production declined 47% Wholesale price index fell 33% Unemployment rate increased 25%
![Page 5: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/5.jpg)
Table
![Page 6: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/6.jpg)
Causes of GDP
Stock Market Crash Banking and Monetary Contraction Gold Standard International Lending and Trade
![Page 7: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/7.jpg)
Stock Market Crash
In 1929, US stock price tripled Panic selling October 1929, stock price decreased by 33%
![Page 8: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/8.jpg)
Stock Market Crash
Aggregate demand decreased. Business investment decreased. People feel poorer.
![Page 9: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/9.jpg)
Banking and Monetary Contraction
Banking panic
Money supply decreased
Lose confidence
![Page 10: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/10.jpg)
Banking and Monetary Contraction
20% of the banks went bankrupt Interest rates increased
![Page 11: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/11.jpg)
Gold Standard
The UK abandon the gold standard. The Great Depression widen to the world
because of gold standard.
![Page 12: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/12.jpg)
International Lending Trade
Lending rate decreased
Trade decreased
![Page 13: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/13.jpg)
Mortgage Types
Prime Subprime
![Page 14: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/14.jpg)
Causes of Subprime Mortgage Crisis
Boom and burst in US housing market Speculation Securitization Financial innovation
![Page 15: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/15.jpg)
Boom and Burst in US Housing Market
Housing prices decreased. Value of mortgage back asset decreased.
![Page 16: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/16.jpg)
Speculation
Interest only adjustable rate mortgage Easily given up houses NINA people
![Page 17: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/17.jpg)
Securitization
Distribute risk Issue new securities
![Page 18: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/18.jpg)
Financial Innovation
Offsetting risk exposure
![Page 19: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/19.jpg)
How Crisis Spread All Over the World?
Credit Channel (Narrowed Economic Activity) Portfolio Investment Channel (Global
Liquidity)
![Page 20: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/20.jpg)
How Crisis Spread All Over the World?
Foreign Trade Channel (Tourism, Real Estate Sale)
Negative Impacts of Expectation (Panic, Demand)
![Page 21: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/21.jpg)
Basic Differences
Gold Standard
1. Credit-portfolio investment
2. Foreign trade
3. Globalisation
4. Negative expectation
![Page 22: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/22.jpg)
Basic Differences
In 1929 - Tax and tariffs increased. In 2008 - Recapitalization
![Page 23: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/23.jpg)
Conclusion-What we learnt?
Interest rates fall during crisis. There must be harmony between fiscal and
monetary policy.
![Page 24: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/24.jpg)
Any Questions?
![Page 25: Sunus Teknikleri](https://reader036.fdocuments.in/reader036/viewer/2022081504/55493bd1b4c905054d8b4c34/html5/thumbnails/25.jpg)
THANKS FOR YOUR
ATTENTION…