The economic boom in 2007, especially in real estate led to bizarre appreciation of land and buildings. There was an according rate set for mortgaging through banks or financial institutions. When the bubble burst, and the prices came to ground, not just the common men suffered, but the entire global structure took a plunge.
Duties and taxes were inordinately levied at that time to accumulate a fair share. These added to the tension, as the world was brought to actual ground from its flying castle. Many venture capitalists and important sensitive indices got bogged down. Companies had to either throw their excess employees out or retain them at sharply reduced salaries.
Also, in those stages, specific areas like textiles and agriculture were relatively ignored. Thus, the base started shifting and exports took a sharp beat. These in addition to other economic premises were responsible as the root cause of recession in 2008-09.
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Posted May 30, 2010 by John Wane under Financial News