The Financial Meltdown Crisis Luis A. Santiago Gaetan

The Financial Meltdown Crisis Luis A. Santiago-Gaetan University of Massachusetts-Amherst Introduction In March 2008, the government of the United States was abruptly confronted with the first signals of what later became the greatest financial crisis in U. S. history since the Great Depression. The beginnings of the financial crisis began with the government intervention or bailout of Bear Sterns, the smallest of the five giant Wall Street investment banks, but the first one known to be in financial trouble. After the government’s rescue of Bear Sterns, more major financial institutions were found to be financially unstable as the meltdown of the financial markets continued, and the U.S. government was confronted with the dilemma to let the other Wall Street investment banks and businesses fail, or to rescue them since they were thought to be too big to fail (Sorkin, 2009). For nearly ten years, warnings about the dangers of letting the unregulated credit derivatives financial market continue to grow reached the highest levels of government in the nation. Whistleblowers like the head of the Futures Commodities Trading Commission Brooksley Born, warned Congress of a possible future financial crisis if the government permitted the situation to continue unchecked. Nonetheless, Congress followed the advice of the central bank and its Chairman Alan Greenspan and other high-ranking administration officials and chose not to take action and perpetuate the status quo, the