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They made sense if and only if the price of houses kept going up and the borrower could sell it in a year ot two at a huge profit.But if house prices declined, the borrower could stop paying and the bank was left with the loss.The price of oil, which reached 5 a barrel in the summer, plunged to under .That plunge eased pump prices, helped commuters, and the airline industry.Banks and financial companies reported losses of over one trillion dollars; investors suffered "paper losses" of many trillions. Paper losses in real estate have been in the trillions; the average price of American houses fell 20%, with 30% and higher declines in California and Florida. corporations have paper losses of trillion in 2008, dropping to trillion in October from trillion in late 2007. International agencies such as the International Monetary Fund are giving guidance for medium-sized countries, like Pakistan and Ukraine.However, thus far ordinary depositors with cash in the bank have suffered no losses. In late September the crisis focused on liquidity—financial companies owned hundreds of billions of dollars of "toxic" real estate assets, mostly based on U. Fannie Mae-backed mortgages; they could not sell the toxic securities because no one knew how much they were worth, and large scale loans between major institutions stopped flowing as the system lost liquidity and froze up. In the panic, people around the world sent their money to the U. and Japan because the banks there are more tightly regulated and considered safer than their own banks.They turned to real estate, with the philosophy "Buy high--sell higher!

The Republicans opposed additional bailout aid to General Motors, which was on the verge of bankruptcy.

By late October it appeared the financial crisis was causing a slowdown of all the economies of the world, and a serious recession with widespread unemployment and business failures The Federal Reserve took aggressive steps to dissolve the liquidity freeze and to allow lending to flow again.

As hundreds of billions of dollars poured into the U. from abroad, financiers looked for imaginative ways to make a profit.

See video The NYTimes says Senator Charles Schumer D-NY, is the most responsible for Wall Street's collapse.

Schumer as a member of the Banking and Finance Committees, led efforts to regulate credit-rating agencies, shield financial institutions from government oversight and tougher regulations, and saved key industry players billions of dollars in taxes and fees.

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