Great Recession Begins

Setting the scene

The Great Recession began December 2007, according to the NBER, triggered by the U.S. housing bubble collapse and subprime mortgage crisis. House prices peaked in 2006, then fell 30% nationally. Banks had packaged risky mortgages into securities that spread risk globally.

What happened

The crisis intensified September 15, 2008, when Lehman Brothers collapsed, the largest bankruptcy in U.S. history. The stock market fell 50%, unemployment peaked at 10% in 2009, and 8.7 million jobs were lost. Governments bailed out banks with trillions.

Why it still matters

The recession led to Dodd-Frank financial reforms and the rise of populism that fueled the Tea Party and Occupy movements. It demonstrated the dangers of deregulation and systemic risk. December 2007 began the worst economic crisis since the Great Depression.

Background

Bailouts and unemployment soared.