how more investments in real estate business cause of failure of financial system?

EthanR answered 4 months ago …

Moazma, I'm not exactly sure what you mean in this question. Are you asking how the sub prime mortgage meltdown caused a collapse in our financial system? That was because due to pressure from liberal politicians, banks took on way too many high risk residential loans. Then, when the people defaulted on those loans, the banks got stuck with a ton of foreclosures. This caused banks to fail, and led to a melt down in stock market prices. As banks tightened their lending standards, small businesses and others were shut out of being able to borrow money to finance homes, businesses, etc. This led to job losses, and a worsening economy.

That's kind of a simple answer to a complex question, but that's pretty much it in a nutshell.