In a sentence, causes of the 2008-2009 economic crisis include subprime mortgages gone bad that were packaged into risky securities gone bad compounded by lax regulatory oversight, a credit crunch (i.e., reduced lending by financial institutions), and lack of consumer confidence. The financial crisis started to unfold in 2006-2007 when large numbers of homeowners started to fall behind on their monthly mortgage payments.
Many subprime mortgages with artificially low initial payments had been made to people who couldn’t really afford …