What were some of the issues that started in 2007 and later on became the great economic crisis

What were some of the issues that started in 2007 and later on became the great economic crisis

Week 5: Dialogue

We learn this week that businesses, banks, and the federal, state and local governments rely on the ability to access funding to expand and pay its bills. In an initial post of 300 words or less, what were some of the issues that started in 2007 and later on became the great economic crisis and how could it have been avoided. See the timeline of events here. How does 1 Corinthians 9 6-7 reflect on us in being good stewards?

Support your post with two scholarly journal references from outside sources and/or Regent University database.

Reply to two, in 125 words or less in APA format, supporting or challenging their beliefs.

Above is the original post that I have done already. Below is one of my fellow students post that I need to respond to.

In 2007 large banks and hedge funds began to recognize that the security they thought they had in assets, (subprime mortgages) were empty loans. The people that had these loans were unable to pay for their homes mortgages and people were going delinquent on payments and also foreclosing on property. These assets that on paper looked secure were actually completely worthless. Some of the largest lenders like Freddie Mac and Fannie Mae announced that they no longer will buy the riskiest subprime loans and this was the beginning of the collapse. After this bank lender after bank lender were getting out of the tangle as quickly as they could through liquidation and filing for bankruptcy. When Lehman Brothers filed bankruptcy in 2008, it sent shockwaves across the markets worldwide (Timeline: Key events in financial crisis, 2013).

The only way that a crisis like this could have been avoided is if they had a more thorough and secure process when granting loans to individuals and companies. If there were specific measures that were taken in qualifying individuals for a loan, such as the amount of income a person made, as well as ownership proof of real tangible assets it would have guaranteed qualified buyers. When a buyer is qualified then their loan is secure. The problem with this economic crisis is that the loans were not secure and it was basically creating a black hole in the economy. If this area of the market was monitored more closely in terms of ethics, this may have also helped avoid the crisis. 1 Corinthians 9:6-7 shows us that when we choose a sinful and deceitful path it will lead us down a path of destruction. The choices we make can cause destruction in the lives around us as well as in our own lives. If we can choose to live according to righteousness, then we choose to be a good steward and sow into the lives of others and our own lives. The result of choosing wisdom and righteousness is that we are promised a life of prosperity and what we sow we shall reap. When we reap a harvest that does not belong to us, it is a form of destruction, like the economic crisis of 2007, people reaped a harvest that was built on a lie and the economy reaped the destruction that sin and dishonesty rewards.

Timeline: Key events in financial crisis. (2013, september 8). Retrieved from USA Today: www.USA.today.com