What are the factors which contributed to the recent recession the world over?

At it's basis is an over-growth of the worlds economies funded by debt, secured largely on property. If you take a look at the rise in the price of property over the last 10 years

(there's a graph of UK property prices here:)

http://www.thecreditcruncher.com/2009/01/uk-econom...

The steep rise between 1995 and 2005 is blatantly unsustainable, but no-one really wanted to face up to it. This period heralded an unprecedented amount of conversion of property-backed capital released into the economy as revenue. The result was bloated profits throughout the economy funded in the main by the over-inflated property market. These profits were channeled into buying out companies and expanding, expanding, expanding until...ooops the property market stalled and the bubble burst. Suddenly all this expansion had over-exposed the companies, in turn the banks were exposed (they funded the expansion) and the growth that was meant to continue, not only stopped, but has begun to go negative (recession = sustained shrinkage of GDP).

During this giddy growth period, the banks had indulged in some extremely suspect activity to amass 'assets' in the form of debt - in particular sub-prime mortgages which they bought with little thought of whether they had any real worth - these mortgages were only good whilst the market was growing (as the houses could be sold to recoup the debt). In a falling market, these 100% mortgages were losing value hand over fist, the banks' reserves were decimated leaving them calling in loans - exposed commercial concerns that had over-stretched themselves now had to sell off assets to pay the banks or risk going into administration. A massive hole developed in the banks funds (I have lumped all banks together for ease of reference) and a lot of big companies fell into that hole, many of them having to sell out, make masses of redundancies and in many cases cease trading (even some of the banks got pulled into the same vacuum).

The crisis will continue until the world economies stabilise and can start to show some small amount of growth again - many commentators believe this will be at the end of 2010, beginning of 2011. Governments and trade associations have consistently underestimated the recession and have tried to 'talk it up':

http://www.thecreditcruncher.com/2008/09/shallow-r...

The truth is somewhat more depressing, there will be a lot of knock-on effects until all the knock-ons are exhausted.

EG: If the motor trades collapse (they will certainly suffer), then the dealerships and garages suffer - the toolmakers suffer, the trade suppliers for plastic mouldings, air conditioning, upholstery, bulbs, sat-nav systems etc.. etc.. all suffer. Each local economy that is supported by large factories in any of these areas collapses taking all the local traders down (food outlets, clothing outlets, electronics retailers etc....) The down-turn in lots of individual areas takes down national retailers, big food chains, fast food outlets, media retail companies - the list is endless... When all these houses of cards have fallen, it will be up to the remaining industry to show an upturn, needless to say the deeper the recession the harder it will be to show any sort of upturn. If you can comprehend these facts then you should be able to see that this is not going to be resolved quickly.

in short: Two years - if we are not out of the woods in two years, we should at least have a good idea of when we will be on the road to recovery..

* MORTGAGES - lending sharks - charging poorer people higher subprime rates that they couldnt afford

* HOUSING- foreclosure

* FRAUD - Ponzi schemes - Madof is a good example of stealing peoples money

* CARS - Automobile industry - tanking in USA because they are not competitive as Japan/Europe and were not fuel efficient when gas is short

* WAR - iraq/afghanistan cost billions

* CONFIDENCE - investor confidence dropped, fear in the market prevents people from investing

* OIL - gas prices were killing everyone and gas is eventually going to run out

* SAVING - people are not saving their money, so there is no money in the banks to lend

* BANKS - invested in bad debt (mortgages) and now cannot lend money because they are broke

* DEBT - US is in trillions of debt (bonds) to China and the Middle East oil countries

* BUSH - financial stimulus did not work

main factor of of the recent recession is human nature of greediness. exploitation of needy mass by capitalists.tendency of availing rights without paying duties.

people biting off more than they can chew.

Fraud and greed and misrepresentation.