Risk and Return Essay: Mortgage Crisis of 2008

The American Dream has been a standard set centuries ago with ideas full of prosperity and success that would drive families upward in the social ladder. The American Dream has become the character by which our country is defined; therefore, it has long been a land that is desired by others living in conditions that aren’t geared toward this ideology. It has changed throughout the years as different historical marks have altered the mindset of the United States. The ability to pursue happiness outright, education, owning a business, and leaving a legacy is the pipeline for this dream that is sought not only by people in the United States, but also by those seeking to establish themselves in this land that is overflowing with honey. One of the major factors in the American Dream which hasn’t changed much over the course of time is homeownership.
Homeownership is becoming an exclusive members’ club (Jones, 2014). The increase in homeownership after 2001 provided a big boom for our economy; temporarily. In 1999, Congress passed the Gramm-Leach-Bliley Act, which was also known as the Financial Services Modernization Act of 1999. This law repealed some of the Glass-Steagall Act of 1933, allowing banks, securities companies, and insurance companies to act as a combination of an investment back, commercial bank, and an insurance company which created financial supermarkets (Jenkins, 2012). The United States economy was in the middle of a recession in 2001 when the attack on the World Trade Center’s took place. “The stock market was closed for four days following the attacks which happened for the first time since the Great Depression” (Armadeo, 2014). The day the stock market reopened the Dow and fallen 7.13%, a 617.78 point loss.
This circumstance and the high costing War on Terror further hindered an already