The fall of the world markets is seen as the cause of an impending global financial credit crunch. World leaders are now trying to address the problem accordingly since its effects are starting to be more evident.  Fear starts to overpower the nation as the economic standing of most countries worsen. Most industries and big companies are in the verge of collapsing due to the failing market. If this persists more people will be affected as thousands are expected to loss their jobs.  Some analysts even predict that the Great Depression is likely to recur.

History has been a witness to numerous economic collapses over the past years. But the Great Depression of the 1920’s was the worst of all. The Black Tuesday was marked as the day where historians believe the biggest economic downturn took effect. International trade plummeted as the stock market experience a sudden collapse as it inflicts devastating effects worldwide. Subsequently, economic meltdowns of different countries across the globe took place as they were struck with its damaging effects. Historians strongly link massive bank failures and stock market crashes as the cause of the greatest depression of all times.

The declaration of bankruptcy of Lehman Brothers in September 14, 2008 marked the start of a fainting market. As the crisis enters its acute phase, failures of American and European banks were prompted consequently. The washout of international banks led to the global financial credit crunch wherein the normal flow of money in a country is disrupted. Money cycle is halted due to the tightening of credits of financial institutions resulting to the difficulty of obtaining loans.

The housing collapse in the American soil is pinpointed as the root cause of the present financial crisis. The vulnerable mortgage industry plays a key role in the world financial arena. The bursting of the housing bubble resulted to a subprime mortgage crisis. The dramatic rise in mortgage foreclosures together with the adverse ramification of bank defaults exposed the extensive susceptibility of the global financial industry. The failed and outdated government regulations and deregulation on housing laws have also greatly contributed in the turn of events. 

Financial panic starts to rise and develop as the world market continues to deteriorate. Investors turn sour over the imminent doom of the international market while the flight to quality occurs. The nation continues to become pessimistic as they loss confidence over an unstable market. The limited resources of the International Monetary Funds threaten the disruption of international trade generating extreme pressure over world currencies. 

The far reaching effects of the credit crunch significantly affected the economic standing of countries worldwide. It yielded negative outcomes including the drastic rise on credit rates; increasing house foreclosures and financial difficulty. Business companies whether big or small are struggling to survive while hoarding of financial loans occur. The unemployment rate continues to rise as companies collapse leaving millions of jobless workers.  Therefore every country must work hand in hand to overcome the ongoing financial difficulty.