RSPH Blogs - Finances!

  The Global Recession/Crisis of 2008: Case Study Let's walk through everything worth knowing about the Great Recession — what caused it, how it unfolded, and how it finally resolved. → Related: What Is a Market Crash, a Recession & a Financial Crisis? (#19) The Setup (2001) By 2001, the dot-com bubble had recently burst, and investors had little appetite left for the share market. At the same time, interest rates were extremely low — around 1% — making bank savings unappealing too. Investors were actively searching for a new place to put their money. → Related: The Dot Com Bubble Boom/Burst Case Study (#47) Banks, meanwhile, were issuing home loans (mortgages) freely, since low interest rates made borrowing attractive to consumers. A mortgage is essentially a loan document: the borrower agrees to repay what they've borrowed, with interest, over time — and if they default, the lender has the right to seize the underlying property. For banks, this made mortgages a reliably p...

  The Great Depression Case Study: What Really Happened? The Roaring Twenties (1920–1929) The 1920s were one of the fastest-growing periods in U.S. economic history. Companies manufactured new goods — washing machines, cars, and more — and people bought them eagerly. Banks extended loans freely, giving people more spending power. The share market performed exceptionally well, and as companies raised more capital, they scaled up production to meet growing demand. This stretch of prosperity earned the era its nickname: the Roaring Twenties . → Related: What Is an Economic Bubble? Stages of a Bubble! (#46) The Turn (1927–1929) Around 1927, cracks began forming beneath the surface. Having watched investors profit handsomely from the share market, many people with no real investing knowledge entered the market and began buying stocks without any fundamental analysis. Stock prices climbed rapidly and became significantly overvalued — a textbook stock market bubble, even though few recogn...

  The Dot-Com Bubble: Boom & Burst Case Study — What Caused It? Today, let's look at one of the most well-known bubbles in financial history: the dot-com bubble — what caused it, what made it burst, and when. → Related: What Is an Economic Bubble? Stages of a Bubble! (#46) Stage 1: Excitement (Starting Around 1995) By the mid-1990s, the internet was still new but rapidly gaining adoption. Tech companies were among the market's best performers, and investors — watching the internet's growing popularity — became convinced that tech companies would deliver enormous future returns. This was the excitement phase: investors grew overly optimistic about tech's future potential and began piling into tech stocks broadly — the bubble had begun to form, though almost no one recognized it as it was happening. Stage 2: Prices Skyrocketing As more investors piled into tech stocks, prices climbed sharply — investors kept buying even as valuations grew increasingly expensive, conf...