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Global Financial Crisis

The Global Financial Crisis, which emerged in the late 2000s, was the result of a complex interplay between economic factors and financial institutions. It began after the internet bubble burst in the late 1990s, leading to economic downturns that prompted the Federal Reserve to lower interest rates, catalyzing a housing bubble fueled by sub-prime mortgages with "AAA" ratings. Key players included mortgage lenders and rating agencies, with devastating consequences for countless individuals. Lessons from this crisis highlight the dangers of excessive borrowing, the fickleness of wealth, and the importance of sound financial practices guided by ethical considerations.

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Global Financial Crisis

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Presentation Transcript

  1. Global Financial Crisis

  2. Outline • What lead us to the crisis? • Background (How it started) • Parties/Players • End result • What can we learn from this?

  3. How it started • Late 1990’s – internet bubble bursts • US economy in trouble • Federal Reserve (equivalent of our Central Bank) reduced rates to stimulate the economy • Reduced rates = low mortgage rates

  4. Global Financial Crisis “AAA” Mortgage Lenders/Banks “AAA” Sub-prime Rating Agency S&P, Moody, Fitch

  5. What to do we learn from this? • “If you can’t afford it now … borrow against future earnings”. • The Bible says Proverbs 13:7 (NIV) 7 One man pretends to be rich, yet has nothing;        another pretends to be poor, yet has great wealth.

  6. How much do you spend? The Millionaire Next door by Stanley and Danko

  7. What to do we learn from this? • “Acquire as much wealth … as fast as you can … whatever it takes ” • The Bible says Proverbs 22:16 (NIV) 16 He who oppresses the poor to increase his wealth        and he who gives gifts to the rich—both come to poverty.

  8. Who wants to get rich quick? • “The reality is that 70 percent of all lottery winners will squander away their winnings in a few years,” the Connecticut financial advisers said in a news release. “In the process, they will see family and friendships destroyed and the financial security they hoped for disappear.” By DEENA WINTER / Lincoln Journal Star (Saturday, Feb 25, 2006 - 07:11:08 pm CST)

  9. Where are you investing on? • Luxury • Vices • Retirement • College fund • Charity

  10. How much is 1 pack/day? Computed at P 30/pact and 4% interest rates

  11. What to do we learn from this? • “Material things provide you a complete sense of satisfaction” • The Bible says 1 Timothy 6:17 (NIV) 17Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.

  12. Closing • 2 Timothy 3:16 (NIV) 16All Scripture is God-breathed and is useful for teaching, rebuking, correcting and training in righteousness, 17so that the man of God may be thoroughly equipped for every good work.

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