An assignment from my second semester (in MBA) for the Macro Economics course. This was a small attempt by the group and me, to capture the basic essence behind the Sub Prime Crisis.

3. 1913 1929 1933 1951 1979
1987 1997 2003 2004

4. 2007
2008

5. AYN
RAND
“If you know that this
life is all that you
have, wouldn't you
make the most of it?”

6. JOHN
TAYLORProfessor of Economics, Stanford University

7. ALANGREENSPAN
“I really didn't get it
until very late in 2005
and 2006”

8. served as a corporate director for
SERVED UNDER FOLLOWING President's

9. PAULKRUGMAN“Despite the bad news, most
commentators, like Mr.
Greenspan, remain optimistic”

11. HENRY
PAULSON"This is far and away the
strongest global economy I've
seen in my business lifetime.“
--July, 2007

13. GREENSPAN STATISTICS
1950: Manufacturing = 59% of GDP ; Financial activities = 9% of GDP
2000-08: Manufacturing = 18% of GDP ; Financial activities = 34% of GDP
Federal Reserve Fund Rate = 10% (1989) -> 3% (1992) -> 1% (2002)
1985: Mutual Fund Market = $8 Billion ; 1993: = $127 Billion
1987-2006: USA Debt = $10.8 Trillion to $41 Trillion

14. LAWRENCE
LINDSAY
“I think there is a long term social cost to all this. The price
we are paying is the increasing fragility of the underlying
financial structure of the household sector” -1996 (Federal
Reserve Governor)

17. Growth rate of total bank loans (left) and
Stock price index(right) in euro area
2%
4%
6%
8%
10%
12%
14%
2003Jan 2004Jan 2005Jan 2006Jan 2007Jan 2008Jan
%change
60
80
100
120
140
160
180
200
index
Loans
Stock price

18. BENBERNANKE“The Federal Reserve
is not currently
forecasting a
recession.” – Jan ‘08

19. SUBPRIME TIMELINE

20. LEHMAN BROS. V/S AIG
WHY WAS LEHMAN BROS. NOT BAILED OUT?

21. November 2008 :
November 2010 : Initiated Quantitative Easing 2, lasted 7 months
1st February, 2014 :
THE AFTERMATH
Initiated Quantitative Easing 1, lasted 17 months
September 2012 :
June, 2013: