A NEW CRISIS FOR THE 21st CENTURY

The world is set against a large crisis which began with a financial crisis to touch many activities and economical sectors. This crisis is compared to the 1929’s crisis which was the largest one of the 20th century and leads to a serious international recession. The big issue today is to find how to make people trust the system again in order to revive the financial activities which will certainly leads to the recovery. But to make people trust the system again, the leaders and traders themselves should trust this unpredictable system. Actually most of the problems are easier to solve if we can understand their beginnings and its effects. Then, we are going to try to understand this crisis by analyzing the origins of the crisis wondering how these subprimes arrived in the market share and how they infected all the banks around the world. In another hand, we will notice the effect of this crisis financially and economically before a debate on the measures taken by the governments.

9/11. Unfortunately the most famous Tuesday of this new century, well known because of its bloodshed and the destruction of a world economical symbol: the twin towers of the World Trade Center. Weirdly, even if we can’t see the link obviously, this event is the origin of the current crisis. In fact, after the attack, the US economy was suffering and, in order to revive it, Alan Greenspan the old charismatic chairman of the Federal Reserve decreased the interest rate to 1 %. This measure allowed people to by houses but this “gift” was a trap. Indeed the rate was fixed for a while but there was no warranty on the rate and it could change. This is what the Federal Reserve did with increasing it from 1% to 5.25% between 2004 and 2006. Thus, the borrowers were trapped and could not pay back the loans. This is at