economic crisis

Everybody is uneasy about current state of economy, but what has caused all this? Firstly, housing markets has a big role. Falling housing prices, shortage of finance and collapsing confidence have caused the economy to decline. big declines in the stock market reduce people’s wealth . Investment and consumer spending has fallen and so unemployment has risen. Also,this can be credited to loans. people give and receve loans higher than ones they can afford.Fannie May and Freddie Mac were the first to fall.They were two largest mortgage companies. Also falling were Lehman Brothers and Merill Lynch, two of largest banks in America one of which Lehman Brothers even survived through great depression. And finally was insurance giant AIG. All of them were allowed to go bankrupt. These recent events show that economy is not stable.It must be fixed in some way or another.This can result in a credit crisis which would cripple our economy and send us into deep recession.This is like a water in a dam. If there is a leak and you put your finger in it, the leak will stop, but it will build pressure so much that another leak will spring. Companies began struggling one by one and now whole financial system is in crisis.Since the economy is primarily based on a consumer and service economy unlike 1930s which was based o agriculture and manufacturing, i think if consumer confidence rises, everthing will be better. It wont be a depression but it wont feel good also.Turkish economy tries to pass through global crisis with minimum damage. Financial institutions and bodies were closely monitoring banking system and Turkey established a strong financial sector before crisis hit it.We can say the world is cautious about crisis because nobody wants to see another Great Depression