1. 5 October 2015 by Sigrid Brevik Wangsness

2.  The largest economy in the world with a major impact on the global economy  Until October 2008 an economic superpower – did the financial crisis change that?  A significant characteristic of the US economy is its resilience, i.e. its ability to bounce back after slowdowns. Has this happened again?

3.  Collapse of the housing market The property bubble burst: House prices dropped dramatically  Sub-prime loans = risky loans (mortgage loans for borrowers with a poor credit history)

4.  The banking crisis Banks had granted too many risky loans Bad debts – huge losses Complicated financial instruments: MBSs (mortgage-backed securities) CDOs (collateralized debt obligations ) “Credit crunch”

5. Vocabulary  To default Treasury bills  Leverage Interest  Homeowners Broker  Mortgage lender AAA rating  Investment banker Prices plummet  Credit Default Swap Foreclose

6.  Speculation and excessive risks on the stock markets Lack of trust Free fall of share prices  Insufficient regulatory system Deregulation encouraged “gambling” Repeal of Glass-Steagall Act (1999)

7.  The Federal Reserve System (the Fed) (= the US central bank) Too low interest for too long? Too easy to borrow from the Fed? Did it therefore indirectly encourage speculation?

8.  US government intervention in the economy Rescue (bail-out) packages  The role of the Federal Reserve System "Head of the Fed” at the time: Ben Bernanke “Quantitative easing”

9.  Part –nationalization of American banks  Cooperation between major economies: Summits (G20), co-ordinated efforts  The IMF

10.  National Deficit/ Debt USD 18.5 trillion. How serious is that?  Trade Deficit Current-account balance: -$429bn (Q2) -2.6% of GDP in 2015 (forecast)  Budget Deficit Budget balance: -2.6% of GDP in 2015 (forecast)

11.  GDP: +2.7% growth in Q2, 2015 Forecast for 2015: +2.4%  Inflation: +0.2% (Aug. 2015) Forecast for 2015: +0.4%  Unemployment: 5.1% (Aug. 2015)

12. (See article in the Comp.)  The Primary Sector  The Secondary Sector  The Tertiary Sector

13.  The Fed o Head of the Fed”: Janet Yellen o Organization o Appointment o Key powers: Monetary Policy Banking Regulations  Wall Street o NYSE, AMEX, NASDAQ o Banks, insurance companies, rating agencies, brokers, asset managers etc.