While few predicted the financial catastrophe, almost everyone has an explanation as to why it happened. To economists, it all seems painfully simple. Too much foreign money was flowing into the US from the Asian countries especially China. The availability of easy credit meant that too many people borrowed to buy properties that they could not afford. The bankers bundled up these loans and sold them to investors that could not understand the complexity of these bundles and the risks inherent in them. Once US borrowers started defaulting on their mortgages, they lost their houses and investors all around the world, including banks and hedge funds, lost their investments. For the critics of Bush administration, the government failed to regulate the activities of the banking behemoths. For the Fed critics, the crisis resulted from Alan Greenspan’s policy of keeping the interest rates low for an extended period of time. Given the ongoing nature of the crisis, many complicated explanations will surface in the years to come. Yet the root of the economic depression might very well lie in one fundamental human instinct: greed.

The World Consequences of US Decline

Volatility and uncertainty threaten the globe
Immanuel Wallerstein
August 16, 2011

The Eurozone Fights for Survival – Part I

To avoid nasty surprises, Europe and China’s financial partnership should include public statistics
François Godement
August 16, 2011

Let Down by Politics

Politicians, more interested in vacationing than ending budget woes, unnerve markets
Nayan Chanda
August 15, 2011

Global Economy: Is Anybody in Control?

National leaders worldwide resist tackling job creation, growing imbalances and other economic crises
David Dapice
August 9, 2011

China Urges US to Protect Creditors by Raising Debt

The US toys with debt default and global calamity
Bettina Wassener, Matthew Saltmarsh
July 15, 2011

Advanced Economies: Minutes to Midnight? Part II

Amid mounting debt, impending defaults, Europe may need outside help for financial rescue
Bruce Stokes
May 2, 2011

The Markets Prey on Debt-Laden Nations

The US is next for the chopping block as global investors demand higher interest rates
Joergen Oerstroem Moeller
January 17, 2011