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85-487: The DNCL has been labelled a "disaster" and over a decade after the law's creation, many telemarketers are either unaware or do not follow the rules imposed by the DNCL. The DNCL continues to receive heavy criticism, the latest being from Senator Percy Downe who referred to it as "totally useless", due to the costly but totally ineffective enforcement, the large number of exempt groups and the ability for anyone from anywhere in

170-478: A crisis of ideas in mainstream economics and within the economics profession, and call for a reshaping of both the economy, economic theory and the economics profession. They argue that such a reshaping should include new advances within feminist economics and ecological economics that take as their starting point the socially responsible, sensible and accountable subject in creating an economy and economic theories that fully acknowledge care for each other as well as

255-490: A minimum, there's a little 'froth' [in the U.S. housing market]...it's hard not to see that there are a lot of local bubbles". The Economist , writing at the same time, went further, saying, "[T]he worldwide rise in house prices is the biggest bubble in history". Real estate bubbles are (by definition of the word "bubble") followed by a price decrease (also known as a housing price crash ) that can result in many owners holding negative equity (a mortgage debt higher than

340-572: A resolution preventing CFTC from regulating derivatives for another six months — when Born's term of office would expire. Ultimately, it was the collapse of a specific kind of derivative, the mortgage-backed security , that triggered the economic crisis of 2008. Paul Krugman wrote in 2009 that the run on the shadow banking system was the fundamental cause of the crisis. "As the shadow banking system expanded to rival or even surpass conventional banking in importance, politicians and government officials should have realised that they were re-creating

425-598: A secure database where you can list your numbers to avoid receiving unsolicited telemarketing calls and marketing faxes." In contrast to the CRTC's uncontrolled distribution of telephone number lists, the Australian system consists of a "List Washing Service", precisely as proposed by the minority opinion which was disregarded by the CRTC. On 3 July 2007, in Telecom Decision CRTC 2007-47, the CRTC disregarded

510-770: A sharp drop in international trade , rising unemployment and slumping commodity prices. Several economists predicted that recovery might not appear until 2011 and that the recession would be the worst since the Great Depression of the 1930s. Economist Paul Krugman once commented on this as seemingly the beginning of "a second Great Depression". Governments and central banks responded with fiscal policy and monetary policy initiatives to stimulate national economies and reduce financial system risks. The recession renewed interest in Keynesian economic ideas on how to combat recessionary conditions. Economists advise that

595-445: A telemarketer and download a set of numbers from the list for a $ 50 fee. It took their reporter ten minutes to do so. It has been proposed that list may be being downloaded and used as a telemarketing list overseas, where there's little that can be done as the CRTC has no jurisdiction outside of Canada. Konrad von Finckenstein , Chair of the CRTC, responded to these allegations on 16 June 2009, labeling them an urban myth, and stating that

680-510: A tool for taking excessive risks. Examples of vulnerabilities in the public sector included: statutory gaps and conflicts between regulators; ineffective use of regulatory authority; and ineffective crisis management capabilities. Bernanke also discussed " Too big to fail " institutions, monetary policy, and trade deficits. There are several "narratives" attempting to place the causes of the recession into context, with overlapping elements. Five such narratives include: Underlying narratives #1–3

765-647: Is a Canadian Senator and former political aide. Since graduating from the University of Prince Edward Island in 1977, Downe has served at the provincial and federal levels of government in Canada. Downe moved to Ottawa following the Liberal victory in the 1993 federal election , and served as executive assistant to the Secretary of State for Veterans Affairs . He subsequently served as executive assistant to

850-413: Is a hypothesis that growing income inequality and wage stagnation encouraged families to increase their household debt to maintain their desired living standard, fueling the bubble. Further, this greater share of income flowing to the top increased the political power of business interests, who used that power to deregulate or limit regulation of the shadow banking system. Narrative #5 challenges

935-716: Is also currently Vice-Chair of The Parliamentary Network on the World Bank & International Monetary Fund . On January 29, 2014, Liberal Party leader Justin Trudeau announced all Liberal Senators, including Downe, were removed from the Liberal caucus, and would continue sitting as Independents. Those Senators created the Senate Liberal Caucus , distinct from the Liberal caucus in the House of Commons. With

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1020-462: Is currently being upgraded and improved. On 13 November 2008, the CRTC declined a request from telecommunications provider Rogers Wireless to permit Canadian wireless customers to block unsolicited SMS text messages through the DNCL. The privacy benefits the list will achieve remain uncertain. A working group of the CRTC held hearings concerning the planned implementation of the list. It submitted recommendations on 26 July 2006. On 3 July 2007,

1105-896: Is made on their behalf to any person who has requested that they receive no telecommunication...". Unlike the DNCL Rules, the Act itself makes no provision for a grace period or expiry, so all do not call requests must be honoured immediately and permanently. In letters dated 27 June 2008, to the Canadian Marketing Association (CMA) and the Canadian Bankers Association (CBA) , CRTC Chairman Konrad von Finckenstein personally ruled that do not call requests from third parties, such as iOptOut.ca , are to be considered "...as valid requests and must be honoured." Due to its overwhelming popularity, iOptOut.ca

1190-466: Is the timing. Subprime lending increased from around 10% of mortgage origination historically to about 20% only from 2004 to 2006, with housing prices peaking in 2006. Blaming affordable housing regulations established in the 1990s for a sudden spike in subprime origination is problematic at best. A more proximate government action to the sudden rise in subprime lending was the SEC relaxing lending standards for

1275-515: The American Enterprise Institute , which advocates for private enterprise and limited government, have asserted that private lenders were encouraged to relax lending standards by government affordable housing policies. They cite The Housing and Community Development Act of 1992, which initially required that 30 percent or more of Fannie's and Freddie's loan purchases be related to affordable housing. The legislation gave HUD

1360-604: The Canadian Radio-television and Telecommunications Commission (CRTC) authority to establish a national do not call list, to establish procedures to administer the Act and to levy penalties for violations. Starting 30 September 2008, residents of Canada were able to register their telephone numbers on the list online, or by telephone, fax or teletype. The Do Not Call List exempts Canadian registered charities , political parties, riding associations, candidates, pollsters and newspapers of general circulation for

1445-492: The Commodity Futures Trading Commission , put forth a policy paper asking for feedback from regulators, lobbyists, and legislators on the question of whether derivatives should be reported, sold through a central facility, or whether capital requirements should be required of their buyers. Greenspan, Rubin, and Levitt pressured her to withdraw the paper and Greenspan persuaded Congress to pass

1530-676: The IMF criteria for being a global recession only in the single calendar year 2009. That IMF definition requires a decline in annual real world GDP per‑capita . Despite the fact that quarterly data are being used as recession definition criteria by all G20 members , representing 85% of the world GDP , the International Monetary Fund (IMF) has decided—in the absence of a complete data set—not to declare/measure global recessions according to quarterly GDP data. The seasonally adjusted PPP ‑weighted real GDP for

1615-661: The Minister of Fisheries and Oceans , and then the Minister of Labour . He joined the Prime Minister's Office as director of appointments in 1998. He became Prime Minister Jean Chrétien 's chief of staff in 2001. He was appointed to the Senate of Canada on June 26, 2003. Downe is currently Vice-Chair of the Senate Standing Committee on Foreign Affairs and International Trade , Joint-Chair of

1700-463: The University of Ottawa , has criticized the changes adopted in the amended Act. He observed that the legislation contained too many exemptions which would not result in a significant decrease in calls for subscribers of the DNCL. Geist expressed particular concern about the extent and duration of the existing business relationship exception. In a 2009 article for the Toronto Star, Geist labelled

1785-429: The 19th and early 20th centuries, the current banking panic is a wholesale panic, not a retail panic. In the earlier episodes, depositors ran to their banks and demanded cash in exchange for their checking accounts. Unable to meet those demands, the banking system became insolvent. The current panic involved financial firms "running" on other financial firms by not renewing sale and repurchase agreements (repo) or increasing

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1870-416: The 19th century. Yet, over the past 30-plus years, we permitted the growth of a shadow banking system – opaque and laden with short term debt – that rivaled the size of the traditional banking system. Key components of the market – for example, the multitrillion-dollar repo lending market, off-balance-sheet entities, and the use of over-the-counter derivatives – were hidden from view, without

1955-506: The CRTC announced it would be issuing a request for proposals to suppliers willing to provide this service. On 21 December 2007, the CRTC announced that it had picked Bell Canada to operate the National Do Not Call List for five years. It is funded from subscription fees paid by telemarketers, rather than relying on fees by end citizens. It became operational on 30 September 2008. Michael Geist , professor of law at

2040-653: The CRTC had rejected the Query/Response methodology, citing grounds of operational cost and complexity, a one-number-at-a-time Query/Response turned out to be so operationally simple and inexpensive that it is provided by the CRTC, free of charge, without restriction, to anyone who cares to use it. Other jurisdictions such as the USA provide similar Query/Response functions to checklists of small sets of numbers simultaneously, also free of charge. Jurisdictions such as Australia protect subscriber privacy, precisely as envisioned by

2125-408: The CRTC's do-not-call list a "disaster" and recommended that parliament return to the original version of Bill C-37 by eliminating all exemptions. He further recommended cross-border cooperation to resolve jurisdictional issues and immediate tough enforcement to send a strong signal to violators. In November 2008, it was reported that the CRTC had received thousands of complaints from individuals about

2210-544: The FCIC Republican minority dissenting report also concluded that U.S. housing policies were not a robust explanation for a wider global housing bubble. The hypothesis that a primary cause of the crisis was U.S. government housing policy requiring banks to make risky loans has been widely disputed, with Paul Krugman referring to it as "imaginary history". One of the other challenges with blaming government regulations for essentially forcing banks to make risky loans

2295-533: The Federal Reserve has been widely discussed, the main point of controversy remains the lowering of the Federal funds rate to 1% for more than a year, which, according to Austrian theorists , injected huge amounts of "easy" credit-based money into the financial system and created an unsustainable economic boom. There is an argument that Greenspan's actions in the years 2002–2004 were actually motivated by

2380-416: The Federal Reserve. Further, American International Group (AIG) had insured mortgage-backed and other securities but was not required to maintain sufficient reserves to pay its obligations when debtors defaulted on these securities. AIG was contractually required to post additional collateral with many creditors and counter-parties, touching off controversy when over $ 100 billion of U.S. taxpayer money

2465-690: The G20‑;zone, however, is a good indicator for the world GDP, and it was measured to have suffered a direct quarter on quarter decline during the three quarters from Q3‑2008 until Q1‑2009, which more accurately mark when the recession took place at the global level. According to the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the recession began in December 2007 and ended in June 2009, and thus extended over eighteen months. The years leading up to

2550-566: The Government had looked into the claims and that there was "no evidence to substantiate them". A notable shortcoming of the Canadian implementation of the do-not-call list is that the list of numbers is given to telemarketers in plain text, in the form of a simple spreadsheet or CSV file without any protection or traceability. Technologies for securing personal data are readily available, as shown by Australia's Do Not Call Register, which "is

2635-507: The Senate Liberal Caucus facing losing official parliamentary caucus status in 2020 with a third of its caucus facing mandatory retirements on their turning age 75, Senator Joseph Day announced that the Senate Liberal Caucus had been dissolved and a new Progressive Senate Group formed in its wake, with the entire membership joining the new group, including this senator. However, on November 18, 2019, Downe announced he

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2720-857: The Standing Joint Committee on the Library of Parliament , a member of the Senate Standing Committee on Internal Economy, Budgets and Administration, and is also on the Executive Committee of the Canada-Europe Parliamentary Association. He was also formerly a member of the Senate Standing Committee on National Finance, the Senate Standing Committee on Legal and Constitutional Affairs and the Senate Standing Committee on Rules, Rights and Procedures of Parliament. Downe

2805-753: The Summit on Financial Markets and the World Economy," dated November 15, 2008, leaders of the Group of 20 cited the following causes: During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in

2890-552: The US, from $ 106,591 to $ 68,839 between 2005 and 2011. The US Financial Crisis Inquiry Commission , composed of six Democratic and four Republican appointees, reported its majority findings in January 2011. It concluded that "the crisis was avoidable and was caused by: There were two Republican dissenting FCIC reports. One of them, signed by three Republican appointees, concluded that there were multiple causes. In his separate dissent to

2975-546: The United States, and 21% in Denmark. Household defaults, underwater mortgages (where the loan balance exceeds the house value), foreclosures, and fire sales are now endemic to a number of economies. Household deleveraging by paying off debts or defaulting on them has begun in some countries. It has been most pronounced in the United States, where about two-thirds of the debt reduction reflects defaults." The onset of

3060-513: The academic definition, the recession ended in the United States in June or July 2009. Journalist Robert Kuttner has argued that 'The Great Recession' is a misnomer. According to Kuttner, "recessions are mild dips in the business cycle that are either self-correcting or soon cured by modest fiscal or monetary stimulus. Because of the continuing deflationary trap, it would be more accurate to call this decade's stagnant economy The Lesser Depression or The Great Deflation." The Great Recession met

3145-464: The bailout measures started under the Bush administration and continued during his administration as completed and mostly profitable as of December 2014 . As of January 2018 , bailout funds had been fully recovered by the government, when interest on loans is taken into consideration. A total of $ 626B was invested, loaned, or granted due to various bailout measures, while $ 390B had been returned to

3230-528: The bailouts. In 2008, TARP allocated $ 426.4 billion to various major financial institutions. However, the US collected $ 441.7 billion in return from these loans in 2010, recording a profit of $ 15.3 billion. Nonetheless, there was a political shift from the Democratic party. Examples include the rise of the Tea Party and the loss of Democratic majorities in subsequent elections. President Obama declared

3315-453: The crisis were characterized by an exorbitant rise in asset prices and associated boom in economic demand. Further, the U.S. shadow banking system (i.e., non-depository financial institutions such as investment banks) had grown to rival the depository system yet was not subject to the same regulatory oversight, making it vulnerable to a bank run . US mortgage-backed securities , which had risks that were hard to assess, were marketed around

3400-668: The crisis) and vulnerabilities (i.e., structural weaknesses in the financial system, regulation and supervision) that amplified the shocks. Examples of triggers included: losses on subprime mortgage securities that began in 2007 and a run on the shadow banking system that began in mid-2007, which adversely affected the functioning of money markets. Examples of vulnerabilities in the private sector included: financial institution dependence on unstable sources of short-term funding such as repurchase agreements or Repos; deficiencies in corporate risk management; excessive use of leverage (borrowing to invest); and inappropriate usage of derivatives as

3485-442: The current value of the property). Several sources have noted the failure of the US government to supervise or even require transparency of the financial instruments known as derivatives . Derivatives such as credit default swaps (CDSs) were unregulated or barely regulated. Michael Lewis noted CDSs enabled speculators to stack bets on the same mortgage securities. This is analogous to allowing many persons to buy insurance on

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3570-523: The downturn. In advanced economies, during the five years preceding 2007, the ratio of household debt to income rose by an average of 39 percentage points, to 138 percent. In Denmark, Iceland, Ireland, the Netherlands, and Norway, debt peaked at more than 200 percent of household income. A surge in household debt to historic highs also occurred in emerging economies such as Estonia, Hungary, Latvia, and Lithuania. The concurrent boom in both house prices and

3655-619: The economic crisis took most people by surprise. A 2009 paper identifies twelve economists and commentators who, between 2000 and 2006, predicted a recession based on the collapse of the then-booming housing market in the United States: Dean Baker , Wynne Godley , Fred Harrison , Michael Hudson , Eric Janszen , Med Jones Steve Keen , Jakob Brøchner Madsen , Jens Kjaer Sørensen, Kurt Richebächer , Nouriel Roubini , Peter Schiff , and Robert Shiller . By 2007, real estate bubbles were still under way in many parts of

3740-405: The economic headwinds that slowed the recovery: On the political front, widespread anger at banking bailouts and stimulus measures (begun by President George W. Bush and continued or expanded by President Obama ) with few consequences for banking leadership, were a factor in driving the country politically rightward starting in 2010. The Troubled Asset Relief Program (TARP) was the largest of

3825-471: The fall of Lehman Brothers on September 15, 2008, a major panic broke out on the inter-bank loan market. There was the equivalent of a bank run on the shadow banking system , resulting in many large and well established investment banks and commercial banks in the United States and Europe suffering huge losses and even facing bankruptcy, resulting in massive public financial assistance (government bailouts). The global recession that followed resulted in

3910-454: The following recovery weaker. Robert Reich claims the amount of debt in the US economy can be traced to economic inequality , assuming that middle-class wages remained stagnant while wealth concentrated at the top, and households "pull equity from their homes and overload on debt to maintain living standards". The IMF reported in April 2012: "Household debt soared in the years leading up to

3995-508: The implementation of the Do Not Call List. People reported that they had actually experienced a notable increase in the number of calls since registering for the list, and were starting to get calls at cellular phone numbers that had never received telemarketing calls before. However, a VoxPop study found that 80% of those registered on the DNCL had noticed a reduction in calls, while 13% had seen an increase. The study concluded that

4080-473: The inflow of investment dollars required to fund the U.S. trade deficit was a major cause of the housing bubble and financial crisis: "The trade deficit, less than 1% of GDP in the early 1990s, hit 6% in 2006. That deficit was financed by inflows of foreign savings, in particular from East Asia and the Middle East. Much of that money went into dodgy mortgages to buy overvalued houses, and the financial crisis

4165-541: The kind of financial vulnerability that made the Great Depression possible – and they should have responded by extending regulations and the financial safety net to cover these new institutions. Influential figures should have proclaimed a simple rule: anything that does what a bank does, anything that has to be rescued in crises the way banks are, should be regulated like a bank." He referred to this lack of controls as "malign neglect". During 2008, three of

4250-568: The largest U.S. investment banks either went bankrupt ( Lehman Brothers ) or were sold at fire sale prices to other banks ( Bear Stearns and Merrill Lynch ). The investment banks were not subject to the more stringent regulations applied to depository banks. These failures exacerbated the instability in the global financial system. The remaining two investment banks, Morgan Stanley and Goldman Sachs , potentially facing failure, opted to become commercial banks, thereby subjecting themselves to more stringent regulation but receiving access to credit via

4335-590: The main headline is that all sorts of poor countries became kind of rich, making things like TVs and selling us oil. China, India, Abu Dhabi, Saudi Arabia made a lot of money and banked it." Describing the crisis in Europe, Paul Krugman wrote in February 2012 that: "What we're basically looking at, then, is a balance of payments problem, in which capital flooded south after the creation of the euro, leading to overvaluation in southern Europe." Another narrative about

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4420-466: The majority and minority opinions of the FCIC, Commissioner Peter J. Wallison of the American Enterprise Institute (AEI) primarily blamed U.S. housing policy, including the actions of Fannie and Freddie , for the crisis. He wrote: "When the bubble began to deflate in mid-2007, the low quality and high risk loans engendered by government policies failed in unprecedented numbers." In its "Declaration of

4505-426: The minority report, by keeping the list in the form of a secure database, and providing only a "List Washing Service". The CRTC's decision to expire registrations is regarded by citizens' rights groups as a technical shortcoming that adds unnecessary operational cost and complexity to the system, as well as limiting registrants' freedom to express their wishes. On 17 June 2008, the USA made registrations permanent until

4590-515: The most likely explanation for the increase was due to timing of the launch of the DNCL with the Great Recession which was affecting American and other foreign companies harder than Canadian, and where unscrupulous telemarketers that did not care about Canadian laws were using random dialers to find new business. In January 2009, numerous media and consumer advocacy organizations reported that anyone can use false information pretending to be

4675-662: The need to take the U.S. economy out of the early 2000s recession caused by the bursting of the dot-com bubble : although by doing so he did not avert the crisis, but only postponed it. Another narrative focuses on high levels of private debt in the US economy. USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990. Faced with increasing mortgage payments as their adjustable rate mortgage payments increased, households began to default in record numbers, rendering mortgage-backed securities worthless. High private debt levels also impact growth by making recessions deeper and

4760-561: The non-consensus report from the DNCL Operations Working Group, which had strongly recommended against allowing telemarketers to download unmarked, untraceable copies of the do-not-call list. With the aim of protecting the confidentiality of cell and unlisted numbers, the non-consensus report had instead advocated a Query/Response methodology, wherein telemarketers would be able to query only the do-not-call status of numbers they already had in their possession. Although

4845-416: The number is disconnected or reassigned, citing "...benefits to the public and to consumer privacy interests...". Another possibility to prevent using the plain text list as a list of people to call is to provide honeypot numbers, unique to each telemarketer. If a telemarketer, or anyone he has given the list to, then calls one of the honeypot numbers, stiff penalties can be applied to the telemarketer. If

4930-544: The obligation and defaulted; U.S. taxpayers paid over $ 100 billion to global financial institutions to honor AIG obligations, generating considerable outrage. A 2008 investigative article in The Washington Post found leading government officials at the time (Federal Reserve Board Chairman Alan Greenspan , Treasury Secretary Robert Rubin , and SEC Chairman Arthur Levitt ) vehemently opposed any regulation of derivatives. In 1998, Brooksley E. Born , head of

5015-487: The origin has been focused on the respective parts played by public monetary policy (notably in the US) and by the practices of private financial institutions. In the U.S., mortgage funding was unusually decentralised, opaque, and competitive, and it is believed that competition between lenders for revenue and market share contributed to declining underwriting standards and risky lending. While Alan Greenspan's role as Chairman of

5100-411: The originating number of a violating call is either foreign or disguised, the CRTC could apply the penalties to the telco which delivered the call to the subscriber's line since that telco acted as an agent of the telemarketer by delivering the call.. There is no indication from the CRTC whether honeypots have been implemented as part of the DNCL. Percy Downe Percy E. Downe (born July 8, 1954)

5185-595: The planet. Though no one knew they were in it at the time, the Great Recession had a significant economic and political impact on the United States. While the recession technically lasted from December 2007 – June 2009 (the nominal GDP trough), many important economic variables did not regain pre-recession (November or Q4 2007) levels until 2011–2016. For example, real GDP fell $ 650 billion (4.3%) and did not recover its $ 15 trillion pre-recession level until Q3 2011. Household net worth, which reflects

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5270-522: The popular claim (narrative #4) that subprime borrowers with shoddy credit caused the crisis by buying homes they couldn't afford. This narrative is supported by new research showing that the biggest growth of mortgage debt during the U.S. housing boom came from those with good credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults. The Economist wrote in July 2012 that

5355-526: The power to set future requirements. These rose to 42 percent in 1995 and 50 percent in 2000, and by 2008 a 56 percent minimum was established. However, the Financial Crisis Inquiry Commission (FCIC) Democratic majority report concluded that Fannie & Freddie "were not a primary cause" of the crisis and that CRA was not a factor in the crisis. Further, since housing bubbles appeared in multiple countries in Europe as well,

5440-410: The protections we had constructed to prevent financial meltdowns. We had a 21st-century financial system with 19th-century safeguards. The Gramm–Leach–Bliley Act (1999), which reduced the regulation of banks by allowing commercial and investment banks to merge, has also been blamed for the crisis, by Nobel Prize –winning economist Joseph Stiglitz among others. Peter Wallison and Edward Pinto of

5525-510: The purpose of soliciting subscriptions. Telemarketing calls from organizations with whom residents have an existing business relationship are also exempt. Telemarketers may also still call if a resident gave them permission in a written form or verbally. This law also does not extend its protections to non-Canadian phone numbers. Paragraph 41.7(4) of The Telecommunications Act requires that every exempted telemarketer "shall maintain their own do not call list and shall ensure that no telecommunication

5610-402: The recession have been described as a symptom of another, deeper crisis by a number of economists. For example, Ravi Batra argues that growing inequality of financial capitalism produces speculative bubbles that burst and result in depression and major political changes . Feminist economists Ailsa McKay and Margunn Bjørnholt argue that the financial crisis and the response to it revealed

5695-488: The recovery was that both individuals and businesses paid down debts for several years, as opposed to borrowing and spending or investing as had historically been the case. This shift to a private sector surplus drove a sizable government deficit. However, the federal government held spending at about $ 3.5 trillion from fiscal years 2009–2014 (thereby decreasing it as a percent of GDP), a form of austerity . Then-Fed Chair Ben Bernanke explained during November 2012 several of

5780-461: The repo margin ("haircut"), forcing massive deleveraging, and resulting in the banking system being insolvent. The Financial Crisis Inquiry Commission reported in January 2011: In the early part of the 20th century, we erected a series of protections – the Federal Reserve as a lender of last resort , federal deposit insurance, ample regulations – to provide a bulwark against the panics that had regularly plagued America's banking system in

5865-499: The same house. Speculators that bought CDS protection were betting significant mortgage security defaults would occur, while the sellers (such as AIG ) bet they would not. An unlimited amount could be wagered on the same housing-related securities, provided buyers and sellers of the CDS could be found. When massive defaults occurred on underlying mortgage securities, companies like AIG that were selling CDS were unable to perform their side of

5950-518: The stimulus measures such as quantitative easing (pumping money into the system) and holding down central bank wholesale lending interest rate should be withdrawn as soon as economies recover enough to "chart a path to sustainable growth ". The distribution of household incomes in the United States became more unequal during the post-2008 economic recovery . Income inequality in the United States grew from 2005 to 2012 in more than two thirds of metropolitan areas. Median household wealth fell 35% in

6035-663: The stock market meant that household debt relative to assets held broadly stable, which masked households' growing exposure to a sharp fall in asset prices. When house prices declined, ushering in the global financial crisis, many households saw their wealth shrink relative to their debt, and, with less income and more unemployment, found it harder to meet mortgage payments. By the end of 2011, real house prices had fallen from their peak by about 41% in Ireland, 29% in Iceland, 23% in Spain and

6120-547: The system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions. Federal Reserve Chair Ben Bernanke testified in September 2010 before the FCIC regarding the causes of the crisis. He wrote that there were shocks or triggers (i.e., particular events that touched off

6205-609: The three years at the list's inception. Numbers are now on the list indefinitely. Legislation entitled Bill C-37, An Act to amend the Telecommunications Act , introduced in the House of Commons , was given first reading on 13 December 2004. It addressed telemarketing calls in Canada and would allow people to sign up to prevent certain telemarketers from contacting them. It received royal assent on 25 November 2005 and came into force on 30 June 2006. The legislation gives

6290-498: The top investment banks during an April 2004 meeting with bank leaders. These banks increased their risk-taking shortly thereafter, significantly increasing their purchases and securitization of lower-quality mortgages, thus encouraging additional subprime and Alt-A lending by mortgage companies. This action by its investment bank competitors also resulted in Fannie Mae and Freddie Mac taking on more risk. The financial crisis and

6375-520: The value of both stock markets and housing prices, fell $ 11.5 trillion (17.3%) and did not regain its pre-recession level of $ 66.4 trillion until Q3 2012. The number of persons with jobs (total non-farm payrolls) fell 8.6 million (6.2%) and did not regain the pre-recession level of 138.3 million until May 2014. The unemployment rate peaked at 10.0% in October 2009 and did not return to its pre-recession level of 4.7% until May 2016. A key dynamic slowing

6460-453: The word "recession" exist: one sense referring definitively to "a period of reduced economic activity" and ongoing hardship; and the more allegoric interpretation used in economics , which is defined operationally , referring specifically to the contraction phase of a business cycle , with two or more consecutive quarters of GDP contraction (negative GDP growth rate) and typically used to influence abrupt changes in monetary policy. Under

6545-431: The world to purchase sets of phone numbers for relatively low fees, and then abuse the Do Not Call List as a calling list. Senator Downe cited multiple examples of constituents, whom he had personally added to the list, receiving a sudden increase in telemarketing calls three months later. On 20 April 2009, the CRTC announced that telephone and fax numbers on the list would be listed on the DNCL for five years, extended from

6630-687: The world, especially in the United States , France, the United Kingdom , Spain , the Netherlands, Australia, the United Arab Emirates, New Zealand , Ireland , Poland , South Africa , Greece , Bulgaria , Croatia , Norway , Singapore , South Korea , Sweden , Finland , Argentina , the Baltic states , India , Romania , Ukraine and China . U.S. Federal Reserve Chairman Alan Greenspan said in mid-2005 that "at

6715-454: The world, as they offered higher yields than U.S. government bonds. Many of these securities were backed by subprime mortgages, which collapsed in value when the U.S. housing bubble burst during 2006 and homeowners began to default on their mortgage payments in large numbers starting in 2007. The emergence of subprime loan losses in 2007 began the crisis and exposed other risky loans and over-inflated asset prices. With loan losses mounting and

6800-725: Was able to accurately predict the advance of this recession, except for minor signals in the sudden rise of forecast probabilities, which were still well under 50%. The recession was not felt equally around the world; whereas most of the world's developed economies , particularly in North America, South America and Europe, fell into a severe, sustained recession, many more recently developing economies suffered far less impact, particularly China , India and Indonesia , whose economies grew substantially during this period. Similarly, Oceania suffered minimal impact , in part due to its proximity to Asian markets. Two interpretations of

6885-421: Was called the subprime mortgage crisis . The combination of banks being unable to provide funds to businesses, and homeowners paying down debt rather than borrowing and spending, resulted in the Great Recession that began in the U.S. officially in December 2007 and lasted until June 2009, thus extending over 19 months. As with most other recessions, it appears that no known formal theoretical or empirical model

6970-636: Was joining the Canadian Senators Group . He resides in Charlottetown with his wife and two daughters. Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009. The scale and timing of the recession varied from country to country (see map). At the time, the International Monetary Fund (IMF) concluded that it

7055-456: Was paid out to major global financial institutions on behalf of AIG. While this money was legally owed to the banks by AIG (under agreements made via credit default swaps purchased from AIG by the institutions), a number of Congressmen and media members expressed outrage that taxpayer money was used to bail out banks. Economist Gary Gorton wrote in May 2009 Unlike the historical banking panics of

7140-571: Was the most severe economic and financial meltdown since the Great Depression . The causes of the Great Recession include a combination of vulnerabilities that developed in the financial system, along with a series of triggering events that began with the bursting of the United States housing bubble in 2005–2012. When housing prices fell and homeowners began to abandon their mortgages, the value of mortgage-backed securities held by investment banks declined in 2007–2008, causing several to collapse or be bailed out in September 2008. This 2007–2008 phase

7225-402: Was the result." In May 2008, NPR explained in their Peabody Award winning program " The Giant Pool of Money " that a vast inflow of savings from developing nations flowed into the mortgage market, driving the U.S. housing bubble. This pool of fixed income savings increased from around $ 35 trillion in 2000 to about $ 70 trillion by 2008. NPR explained this money came from various sources, "[b]ut

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