Case Study

The Global Financial Crisis of 2008: The Role of Greed,Fear, and Oligarchs

Submitted By:

Salman Zahid
Roll No:16101720-005

Submitted to:
Sir. Waqas Manzoor Dar

MPhil in Business Administration (Human Resource)

Department of Management Sciences
 Summary
“This case study is discussed by Cate Reaves on March 16, 2012. In this case study they discuss
the financial crises of 2008. In October 9,2007 the Dow Jones was over viewing his trading
average which was pushed in other countries beside the Dow, all credit markets were about to
finish. The single traders were in a situation in which they ignore the mortgages and college
tuitions. By early 2009 the market becomes constant just like the U.S stock market. In the month
of May the test was settled for the largest 19 banks in the U.S to test their ability to hold up a
future economic turn down. Simon Jones the professor at MIT Sloan school he believed that the
present crisis was due to powerful leaders. He thinks that the Elite business interests have an
important role for creating the crises.

In the stabilization process the important thing is that to understand what, how and why the
financial crises come into being. Johnson and Lo were greatly involved to find out the solution to
these crises and also thinks that how these solutions may be implemented. The housing market
crises which were started in 2008, according to Johnson they tiring away of the housing markets
indicate a decay of wealth. In the view of investors this was the more safe and profitable
investment but from the 1990 to 2000 in the country the prices of houses rise with compound
growth rate of 8%. There were so many reasons where the govt. supporting the banks by
providing the help of billion dollars.

Who is to blamed for these crises, either we blamed to top management in banks or investment
firms, some blamed to the controllers and to the investment banks, some blamed to politic
authorities, some govt. ventures believed that there are some govt. sponsors which are blamed to
these crises because they are responsible for mortgage in order to make sure that funds are just
given to institutions which loaned the money to the house buyers. In 2008 during presidential
elections the speech was made on what to do? They just describe the method nothing to do and
remain the markets to work themselves but the chairman of federal govt. Ben Bernanke thinks
that doing nothing may be disastrous and he said to congress, “if we let the banking system fail,
no one can talk about the great depression anymore, because this will be so much worse.”
President George W Bush and the upcoming president Barack Obama do several things to
recover the country on a right path. In October 2008 government form several banks and some
other financial institutions. Second in early 2009 they also introduce public private investments
for the housing screams loans and for broadening the markets as well. They also decide to
nationalize the banks. They decide to bring the government managed programs. By which they
reduce the man power and secondly the timing issue. There was again question raised to
reprivatize the banks but they need much capital to fulfill the capital demand for supplies. “

“Lo thinks that they need more technology improvements and for this they need more scientists.
He believes that they don’t need the PhDs; either they need P.S.Ds which stands for poor, smart
and deep desires of success. So he suggested enhancing the PhDs in financial technologies.”