Triggered by the collapse of the housing bubble in the US between 2007 and 2008, and the subsequent liquidation shortfall deficit in the US financial sector, the crisis has lead to losses in the trillions of dollars, the failure of key international businesses and banks, and a significant decline in the overall global economic activity. Prior to the meltdown, the US housing market had been expanding at such rapid rates that lower-income borrowers were encouraged to assume difficult mortgages, at low introductory and non fixed interest rates. Lower interest rates and an influx of large inflows of foreign investments created easy conditions for a housing boom and encouraged debt-financed consumption prior to the crisis. However, as housing prices declined and interest rates increased, consumers began to default on housing loans, unable to contain the growing debts as a result of rapidly increasing interest rates. In tandem with the increasing interest rates was a dramatic rise in foreclosures, leading to the abandoning of housing stocks by speculative investors and the beginning of the downward spiral of the housing market.

Major financial institutions that had invested in subprime lending began reporting losses as the ongoing foreclosure rates reached epidemic proportions. As the financial strength of key banking institutions began to erode, questions and confusion circulated about the extent and underlying causes of the crisis. Specifically, the shadow banking system (i.e. investment banks and hedge funds), which are critical to the credit markets supporting most developed nations financial systems, but not subject to the same regulatory controls as the public banking system, had been a key factor in both the creation and collapse of the housing bubble in so far as they were main actors involved in the falsification of the mortgages being sold to Wall street banks in an effort to make quick profits.

The extent that falsified mortgages affected US financial stability is illustrated in the fact that most of the companies and banks affected were those directly related to home construction and mortgage lending. The home credit crisis came about as a direct consequence to the implosion of this shadow banking system, which in recent years had grown to equal, if not more, importance to the traditional banking system. While it is still too early to ascertain the exact degree of violations to housing and land rights globally, we can briefly offer a general description of the violations and victims thus far. The most immediate victims of the financial chaos that ensued were the two million, mostly lower income Americans who were “…forced from their homes in one of the largest forced evictions in history.”

While underreported in the mainstream media, acts of violence and robbery have been on the rise across the US as a result. Specifically, “an analysis of national, regional, and local news reports from 2008-2009 indicates a largely silent, nationwide [US] epidemic of drastic measures and extreme acts for which the economy seems to have been a catalyst. News of such deeds linked to economic woes -- from armed robberies to pay the rent to financially-motivated suicides to familicides (murder/suicides in which both parents and their children die) in the face of financial ruin -- has filtered out of cities and towns in most U.S. states.” Across Europe, the economic crisis has had varying impacts, with the most severe being the collapse of the Greek and Iceland economies. In Eastern Europe, where the crisis has had its most severe impact, many states, particularly in countries such as Bulgaria and the Balkans, faced mass rioting political stabilization, social strife and an increase in ethnic tensions as a result.

Even more serious, across the developing world, where government social safety nets are virtually non-existent, the crisis has devastated communities globally causing tens of millions of people to fall into extreme poverty and/or joblessness. The world’s poorest and minority groups, including migrants and indigenous populations, continue to bear the brunt of the crisis.

See also details for specific other countries, at: http://wapedia.mobi/en/Financial_crisis_of_2007%E2%80%932010.

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