United States housing bubble
The United States housing bubble was a real estate bubble affecting over half of the U. S. states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, reached new lows in 2012. On December 30, 2008, the Case–Shiller home price index reported its largest price drop in its history; the credit crisis resulting from the bursting of the housing bubble is an important cause of the 2007–2009 recession in the United States. Increased foreclosure rates in 2006–2007 among U. S. homeowners led to a crisis in August 2008 for the subprime, Alt-A, collateralized debt obligation, credit, hedge fund, foreign bank markets. In October 2007, the U. S. Secretary of the Treasury called the bursting housing bubble "the most significant risk to our economy". Any collapse of the U. S. housing bubble has a direct impact not only on home valuations, but mortgage markets, home builders, real estate, home supply retail outlets, Wall Street hedge funds held by large institutional investors, foreign banks, increasing the risk of a nationwide recession.
Concerns about the impact of the collapsing housing and credit markets on the larger U. S. economy caused President George W. Bush and the Chairman of the Federal Reserve Ben Bernanke to announce a limited bailout of the U. S. housing market for homeowners who were unable to pay their mortgage debts. In 2008 alone, the United States government allocated over $900 billion to special loans and rescues related to the U. S. housing bubble. This was shared between the private sector; because of the large market share of Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation as well as the Federal Housing Administration, they received a substantial share of government support though their mortgages were more conservatively underwritten and performed better than those of the private sector. Land prices contributed much more to the price increases; this can be seen in the building cost index in Fig. 1. An estimate of land value for a house can be derived by subtracting the replacement value of the structure, adjusted for depreciation, from the home price.
Using this methodology and Palumbo calculated land values for 46 U. S. metro areas. Housing bubbles may occur in global real estate markets. In their late stages, they are characterized by rapid increases in the valuations of real property until unsustainable levels are reached relative to incomes, price-to-rent ratios, other economic indicators of affordability; this may be followed by decreases in home prices that result in many owners finding themselves in a position of negative equity—a mortgage debt higher than the value of the property. The underlying causes of the housing bubble are complex. Factors include tax policy low interest rates, tax lending standards, failure of regulators to intervene, speculative fever; this bubble may be related to the stock dot-com bubble of the 1990s. This bubble coincides with the real estate bubbles of the United Kingdom, Hong Kong, Poland and South Korea. While bubbles may be identifiable in progress, bubbles can be definitively measured only in hindsight after a market correction, which began in 2005–2006 for the U.
S. housing market. Former U. S. Federal Reserve Board Chairman Alan Greenspan said "We had a bubble in housing", said in the wake of the subprime mortgage and credit crisis in 2007, "I didn't get it until late in 2005 and 2006." In 2001, Alan Greenspan dropped interest rates to a low 1% in order to jump the economy after the ".com" bubble. It was bankers and other Wall Street firms started borrowing money due to its inexpensiveness; the mortgage and credit crisis was caused by the inability of a large number of home owners to pay their mortgages as their low introductory-rate mortgages reverted to regular interest rates. Freddie Mac CEO Richard Syron concluded, "We had a bubble", concurred with Yale economist Robert Shiller's warning that home prices appear overvalued and that the correction could last years, with trillions of dollars of home value being lost. Greenspan warned of "large double digit declines" in home values "larger than most people expect". Problems for home owners with good credit surfaced in mid-2007, causing the United States' largest mortgage lender, Countrywide Financial, to warn that a recovery in the housing sector was not expected to occur at least until 2009 because home prices were falling "almost like never before, with the exception of the Great Depression".
The impact of booming home valuations on the U. S. economy since the 2001–2002 recession was an important factor in the recovery, because a large component of consumer spending was fueled by the related refinancing boom, which allowed people to both reduce their monthly mortgage payments with lower interest rates and withdraw equity from their homes as their value increased. Although an economic bubble is difficult to identify except in hindsight, numerous economic and cultural factors led several economists to argue that a housing bubble existed in the U. S. Dean Baker identified the bubble in August 2002, thereafter warning of its nature and depth, the political reasons it was being ignored. Prior to that, Robert Prechter wrote about it extensively as did Professor Shiller in his original publication of Irrational Exuberance in the year 2000; the burst of the housing bubble was predicted by a handful of political and economic analysts, such as Jeffery Robert Hunn in a March 3, 2003, editorial.
Hunn wrote: [
A steakhouse, steak house, or chophouse is a restaurant that specializes in steaks and chops. Modern steakhouses can offer other cuts of meat such as poultry, roast prime rib, veal and seafood. Chophouses served individual portions of meat, known as chops; the traditional nature of the food served was zealously maintained through the 19th century despite the new cooking styles from the Continent, which were beginning to become fashionable. The houses were only open for men; the steakhouse started in the United States in the mid-19th century as a development from traditional inns and bars. Steakhouses can be formal fine dining restaurants; the oldest continuously operating steakhouse in the United States is the Old Homestead Steakhouse in New York City, established in 1868. Prior to that there were chophouses in New York City such as "Cobweb Hall" owned by David Pattullo. "Cobweb Hall" was known for their mutton chops and offered additional menu options such as beefsteaks, lamb kidneys and potatoes.
The following are lists of notable steakhouses. Café de Paris sauce Churrascaria Seafood restaurant Steak frites
Florida is the southernmost contiguous state in the United States. The state is bordered to the west by the Gulf of Mexico, to the northwest by Alabama, to the north by Georgia, to the east by the Atlantic Ocean, to the south by the Straits of Florida. Florida is the 22nd-most extensive, the 3rd-most populous, the 8th-most densely populated of the U. S. states. Jacksonville is the most populous municipality in the state and the largest city by area in the contiguous United States; the Miami metropolitan area is Florida's most populous urban area. Tallahassee is the state's capital. Florida's $1.0 trillion economy is the fourth largest in the United States. If it were a country, Florida would be the 16th largest economy in the world, the 58th most populous as of 2018. In 2017, Florida's per capita personal income was ranking 26th in the nation; the unemployment rate in September 2018 was 3.5% and ranked as the 18th in the United States. Florida exports nearly $55 billion in goods made in the 8th highest among all states.
The Miami Metropolitan Area is by far the largest urban economy in Florida and the 12th largest in the United States with a GDP of $344.9 billion as of 2017. This is more than twice the number of the next metro area, the Tampa Bay Area, which has a GDP of $145.3 billion. Florida is home to 51 of the world's billionaires with most of them residing in South Florida; the first European contact was made in 1513 by Spanish explorer Juan Ponce de León, who called it la Florida upon landing there in the Easter season, known in Spanish as Pascua Florida. Florida was a challenge for the European colonial powers before it gained statehood in the United States in 1845, it was a principal location of the Seminole Wars against the Native Americans, racial segregation after the American Civil War. Today, Florida is distinctive for its large Cuban expatriate community and high population growth, as well as for its increasing environmental issues; the state's economy relies on tourism and transportation, which developed in the late 19th century.
Florida is renowned for amusement parks, orange crops, winter vegetables, the Kennedy Space Center, as a popular destination for retirees. Florida is the flattest state in the United States. Lake Okeechobee is the largest freshwater lake in the U. S. state of Florida. Florida's close proximity to the ocean influences many aspects of daily life. Florida is a reflection of multiple inheritance. Florida has attracted many writers such as Marjorie Kinnan Rawlings, Ernest Hemingway and Tennessee Williams, continues to attract celebrities and athletes, it is internationally known for golf, auto racing, water sports. Several beaches in Florida have emerald-colored coastal waters. About two-thirds of Florida occupies a peninsula between the Gulf of the Atlantic Ocean. Florida has the longest coastline in the contiguous United States 1,350 miles, not including the contribution of the many barrier islands. Florida has a total of 4,510 islands; this is the second-highest number of islands of any state of the United States.
It is the only state that borders both the Gulf of the Atlantic Ocean. Much of the state is characterized by sedimentary soil. Florida has the lowest high point of any U. S. state. The climate varies from subtropical in the north to tropical in the south; the American alligator, American crocodile, American flamingo, Roseate spoonbill, Florida panther, bottlenose dolphin, manatee can be found in Everglades National Park in the southern part of the state. Along with Hawaii, Florida is one of only two states that has a tropical climate, is the only continental state with either a tropical climate or a coral reef; the Florida Reef is the only living coral barrier reef in the continental United States, the third-largest coral barrier reef system in the world. By the 16th century, the earliest time for which there is a historical record, major Native American groups included the Apalachee of the Florida Panhandle, the Timucua of northern and central Florida, the Ais of the central Atlantic coast, the Tocobaga of the Tampa Bay area, the Calusa of southwest Florida and the Tequesta of the southeastern coast.
Florida was the first region of the continental United States to be visited and settled by Europeans. The earliest known European explorers came with the Spanish conquistador Juan Ponce de León. Ponce de León spotted and landed on the peninsula on April 2, 1513, he named the region Florida. The story that he was searching for the Fountain of Youth is mythical and only appeared long after his death. In May 1539, Conquistador Hernando de Soto skirted the coast of Florida, searching for a deep harbor to land, he described seeing a thick wall of red mangroves spread mile after mile, some reaching as high as 70 feet, with intertwined and elevated roots making landing difficult. The Spanish introduced Christianity, horses, the Castilian language, more to Florida. Spain established several settlements with varying degrees of success. In 1559, Don Tristán de Luna y Arellano established a settlement at present-day Pensacola, making it the first attempted settlement in Florida, but it was abandoned by 1561.
In 1565, the settlement of St. Augustine was established under the leadership of admiral and
Anglo Irish Bank hidden loans controversy
The Anglo Irish Bank hidden loans controversy began in Dublin in December 2008 when Seán FitzPatrick, the chairman of Anglo Irish Bank, admitted he had hidden a total of €87 million in loans from the bank, triggering a series of incidents which led to the eventual nationalisation of Anglo on 21 January 2009. FitzPatrick subsequently resigned his position and was followed within twenty-four hours by the bank's non-executive director, Lar Bradshaw and chief executive, David Drumm. A new chairman of Anglo, Donal O'Connor, was appointed from the board, a move welcomed by the Irish Minister for Finance, Brian Lenihan. A number of investigations have been launched into the reasons behind the three resignations; the Central Bank of Ireland is carrying out a review of the bank's dealings, although its Financial Regulator, Patrick Neary, has since resigned his position. So too did a number of other chairmen and executives involved with Anglo, Irish Life and Permanent and Irish Nationwide. Within days of the initial admission, an announcement was made that Anglo Irish Bank would be one of three that would be recapitalised by the Irish government.
The recapitalisation of Anglo Irish Bank was expected to be effected in mid-January 2009, following an Extraordinary General Meeting. Lenihan instead unexpectedly announced the nationalisation of Anglo Irish Bank the night before the EGM due to difficulties he encountered with the recapitalisation process. Recapitalisations of the other two banks mentioned were expected by the end of March 2009 but, according to Taoiseach Brian Cowen, were expected to be finalised in early February 2009 at a total of €7 billion; the nationalisation of Anglo Irish Bank on 21 January 2009 followed two more resignations earlier that month. On 7 January 2009, another director, Willie McAteer, becoming the fourth casualty of the controversy. Two days the Financial Regulator Patrick Neary retired amidst much criticism over his handling of the affair. After the nationalisation, the Chairman of Irish Nationwide, Dr Michael Walsh, resigned on 17 February, one week to the day that government-appointed directors announced they were investigating a deposit of billions of euro by Irish Life and Permanent, placed in Anglo Irish Bank before the end of its financial year.
Taoiseach Brian Cowen denied claims that he was protecting a "Golden Circle" of wealthy financiers from being identified. This mysterious group of ten businessmen is said to have received loans from Anglo Irish Bank in return for buying shares, in a move designed to keep the bank afloat. Starting in 1986, Seán "Seanie" FitzPatrick spent eighteen years as chief executive of Anglo Irish Bank, during which time the bank grew from a small operator into the third-largest bank in Ireland; when he became the bank's chairman in 2005, handing over the position of chief executive to David Drumm, the bank was recording annual profits of over €500 million. The Anglo share price peaked at € 17.60 an increase from under € 1 ten years previously. Anglo was valued at nearly €13 billion and FitzPatrick's 4.5 million Anglo shares were worth nearly €80 million at this time. Prior to FitzPatrick's resignation, the Anglo share price had dropped to €0.32, a drop of 98% with the entire bank valued at a low €242 million and FitzPatrick's stake reduced to €1.5 million.
The Financial Regulator first uncovered the €87 million loans in January 2008 when inspectors from the regulator's offices carried out an inspection into the loan book of rival lender, Irish Nationwide Building Society. The inspectors noticed that a large loan was provided to FitzPatrick at Anglo Irish Bank and repaid; the Regulator discovered at a date that similar loans were provided to FitzPatrick in September 2008 and repaid by him in October 2008. When the issue was raised with Anglo Irish Bank it was discovered that there were further loans between the two banks over an extended period of eight years, it is uncertain. Every Anglo annual report contained a note displaying the total loans given to directors of the bank; this total was measured at a single point in time. In the case of Anglo this occurred on 30 September. FitzPatrick, instead of revealing the true figures of his loans, transferred some of them to Irish Nationwide Building Society, returning them to Anglo at a date, he acted in a manner.
Financial authorities investigated. The Chief Executive of the Financial Regulator said that "a lay person would expect that issues of this nature and this magnitude would have been picked up" by the external auditors, Ernst & Young. After receiving legal advice Ernst & Young declined to appear before a parliamentary committee; this in turn led to inaccurate figures for the total directors' loans given for eight consecutive years in the end of year Anglo accounts. 2008 was the first occasion on which FitzPatrick revealed his true figure, that of €87 million or twice the total of the other twelve directors' loan figures. The situation was described as Ireland's version of Enron, the American energy company which went bankrupt in 2001, it was said that the principals would have been arrested if this had occurred in the United States. FitzPatrick issued a statement on the evening of 18 December 2008, linking his resignation with a €87 million loan he had from the bank. Ireland's Minister for Finance, Brian Lenihan welcomed the appointment of a new chairman, Donal O'Connor, an official with a substantial commercial track record, saying he "seems a natural choice" for the role.
Texas is the second largest state in the United States by both area and population. Geographically located in the South Central region of the country, Texas shares borders with the U. S. states of Louisiana to the east, Arkansas to the northeast, Oklahoma to the north, New Mexico to the west, the Mexican states of Chihuahua, Nuevo León, Tamaulipas to the southwest, while the Gulf of Mexico is to the southeast. Houston is the most populous city in Texas and the fourth largest in the U. S. while San Antonio is the second-most populous in the state and seventh largest in the U. S. Dallas–Fort Worth and Greater Houston are the fourth and fifth largest metropolitan statistical areas in the country, respectively. Other major cities include Austin, the second-most populous state capital in the U. S. and El Paso. Texas is nicknamed "The Lone Star State" to signify its former status as an independent republic, as a reminder of the state's struggle for independence from Mexico; the "Lone Star" can be found on the Texan state seal.
The origin of Texas's name is from the word taysha. Due to its size and geologic features such as the Balcones Fault, Texas contains diverse landscapes common to both the U. S. Southern and Southwestern regions. Although Texas is popularly associated with the U. S. southwestern deserts, less than 10% of Texas's land area is desert. Most of the population centers are in areas of former prairies, grasslands and the coastline. Traveling from east to west, one can observe terrain that ranges from coastal swamps and piney woods, to rolling plains and rugged hills, the desert and mountains of the Big Bend; the term "six flags over Texas" refers to several nations. Spain was the first European country to claim the area of Texas. France held a short-lived colony. Mexico controlled the territory until 1836 when Texas won its independence, becoming an independent Republic. In 1845, Texas joined the union as the 28th state; the state's annexation set off a chain of events that led to the Mexican–American War in 1846.
A slave state before the American Civil War, Texas declared its secession from the U. S. in early 1861, joined the Confederate States of America on March 2nd of the same year. After the Civil War and the restoration of its representation in the federal government, Texas entered a long period of economic stagnation. Four major industries shaped the Texas economy prior to World War II: cattle and bison, cotton and oil. Before and after the U. S. Civil War the cattle industry, which Texas came to dominate, was a major economic driver for the state, thus creating the traditional image of the Texas cowboy. In the 19th century cotton and lumber grew to be major industries as the cattle industry became less lucrative, it was though, the discovery of major petroleum deposits that initiated an economic boom which became the driving force behind the economy for much of the 20th century. With strong investments in universities, Texas developed a diversified economy and high tech industry in the mid-20th century.
As of 2015, it is second on the list of the most Fortune 500 companies with 54. With a growing base of industry, the state leads in many industries, including agriculture, energy and electronics, biomedical sciences. Texas has led the U. S. in state export revenue since 2002, has the second-highest gross state product. If Texas were a sovereign state, it would be the 10th largest economy in the world; the name Texas, based on the Caddo word táyshaʼ "friend", was applied, in the spelling Tejas or Texas, by the Spanish to the Caddo themselves the Hasinai Confederacy, the final -s representing the Spanish plural. The Mission San Francisco de los Tejas was completed near the Hasinai village of Nabedaches in May 1690, in what is now Houston County, East Texas. During Spanish colonial rule, in the 18th century, the area was known as Nuevo Reino de Filipinas "New Kingdom of the Philippines", or as provincia de los Tejas "province of the Tejas" also provincia de Texas, "province of Texas", it was incorporated as provincia de Texas into the Mexican Empire in 1821, declared a republic in 1836.
The Royal Spanish Academy recognizes both spellings and Texas, as Spanish-language forms of the name of the U. S. State of Texas; the English pronunciation with /ks/ is unetymological, based in the value of the letter x in historical Spanish orthography. Alternative etymologies of the name advanced in the late 19th century connected the Spanish teja "rooftile", the plural tejas being used to designate indigenous Pueblo settlements. A 1760s map by Jacques-Nicolas Bellin shows a village named Teijas on Trinity River, close to the site of modern Crockett. Texas is the second-largest U. S. state, with an area of 268,820 square miles. Though 10% larger than France and twice as large as Germany or Japan, it ranks only 27th worldwide amongst country subdivisions by size. If it were an independent country, Texas would be the 40th largest behind Zambia. Texas is in the south central part of the United States of America. Three of its borders are defined by rivers; the Rio Grande forms a natural border with the Mexican states of Chihuahua, Nuevo León, Tamaulipas to the south.
The Red River forms a natural border with Arkansas to the north. The Sabine River forms a natural border with Louisiana to the east; the Texas Panhandle has an eastern border with Oklahoma at 100° W, a northern border with Oklahoma at 36°30' N and a western
Great Recession in the United States
The Great Recession in the United States was a severe financial crisis combined with a deep recession. While the recession lasted from December 2007 to June 2009, it took several years for the economy to recover to pre-crisis levels of employment and output; this slow recovery was due in part to households and financial institutions paying off debts accumulated in the years preceding the crisis along with restrained government spending following initial stimulus efforts. It followed the bursting of the housing bubble, the housing market correction and subprime mortgage crisis; the U. S. Financial Crisis Inquiry Commission reported its findings in January 2011, it concluded that "the crisis was avoidable and was caused by: Widespread failures in financial regulation, including the Federal Reserve's failure to stem the tide of toxic mortgages. The GDP bottom, or trough, was reached in the second quarter of 2009. Real GDP did not regain its pre-crisis peak level until Q3 2011. Unemployment rose from 4.7% in November 2007 to peak at 10% in October 2009, before returning to 4.7% in May 2016.
The total number of jobs did not return to November 2007 levels until May 2014. Households and non-profit organizations added $8 trillion in debt during the 2000-2008 period reduced their debt level from the peak in Q3 2008 until Q3 2012, the only period this debt declined since at least the 1950s. However, the debt held by the public rose from 35% GDP in 2007 to 77% GDP by 2016, as the government spent more while the private sector reduced the debt burdens accumulated during the pre-recession decade. President Obama declared the bailout measures started under the Bush Administration and continued during his Administration as completed and profitable as of December 2014. After the Great Depression of the 1930s, the American economy experienced robust growth, with periodic lesser recessions, for the rest of the 20th century; the federal government enforced the Securities Exchange Act and The Chandler Act, which regulated the financial markets. The Securities Exchange Act of 1934 regulated the trading of the secondary securities market and The Chandler Act regulated the transactions in the banking sector.
There were a few investment banks, small by current standards, that expanded during the late 1970s, such as JP Morgan. The Reagan Administration in the early 1980s began a thirty-year period of financial deregulation; the financial sector expanded, in part because investment banks were going public, bringing them vast sums of stockholder capital. From 1978 to 2008, the average salary for workers outside of investment banking in the U. S. increased from $40k to $50k – a 25 percent salary increase - while the average salary in investment banking increased from $40k to $100k – a 150 percent salary increase. Deregulation precipitated financial fraud - tied to real estate investments - sometimes on a grand scale, such as the savings and loan crisis. By the end of the 1980s, many workers in the financial sector were being jailed for fraud, but many Americans were losing their life savings. Large investment banks began developing Financial conglomerates. In the early months of 2008, many observers believed that a U.
S. recession had begun. The collapse of Bear Stearns and the resulting financial market turbulence signaled that the crisis would not be mild and brief. Alan Greenspan, ex-Chairman of the Federal Reserve, stated in March 2008 that the 2008 financial crisis in the United States "is to be judged in retrospect as the most wrenching since the end of World War II". A chief economist at Standard & Poor's said in March 2008 he had projected a worst-case-scenario in which the country would endure a double-dip recession, in which the economy would recover in the summer 2008, before plunging again. Under this scenario, the economy's total output, as measured by the gross domestic product, would drop by 2.2 percentage points, making it among the worst recessions in the post World War II period. The former head of the National Bureau of Economic Research said in March 2008 that he believed the country was in a recession, it could be a severe one. A number of private economists predicted a mild recession ending in the summer of 2008 when the economic stimulus checks going to 130 million households started being spent.
A chief economist at Moody's predicted in March 2008 that policymakers would act in a concerted and aggressive way to stabilize the financial markets, that the economy would suffer, but not enter a prolonged and severe recession. It takes many months before the National Bureau of Economic Research, the unofficial arbiter of when recessions begin and end, would make its own ruling. According to numbers published by the Bureau of Econo
Great Recession in the Americas
North America was one of the focal points of the global, Great Recession. While Canada has managed to return its economy nearly to the levels it enjoyed prior to the recession, the United States and Mexico are still under the influence of the worldwide economic slowdown; the cost of staple items dropped in the United States as a result of the recession. The United States entered 2008 during a housing market correction, a subprime mortgage crisis and a declining dollar value. In February, 63,000 jobs were lost, a 5-year record. In September, 159,000 jobs were lost, bringing the monthly average to 84,000 per month from January to September 2008. Canada was one of the last industrialized nations to enter into a downturn. GDP growth was negative in Q1, but positive in Q2 and Q3 of 2008; the recession started in Q4. The 1-year delay of the start of the recession in Canada relative to the U. S. is explained by two factors. First, Canada has a strong banking sector not weighed-down by the same degree of consumer-related debt issues that existed in the United States.
The United States economy collapsed from within, while the Canadian economy was being hurt by its trade relationship with the United States. Second, commodity prices continued to rise through to June 2008, supporting a key component of the Canadian economy and delaying the start of recession. In early December 2008, the Bank of Canada, in announcing that it was lowering its central bank interest rate to the lowest level since 1958 declared that Canada's economy was entering in recession; the Bank of Canada has since announced. The country's unemployment rate could rise to 7.5% in the next two years, according to the latest OECD report. On July 23, 2009, the Bank of Canada declared the recession to be over in Canada. However, the true economic recovery did not begin until November 30, 2009; the Canadian economy would expand at an annualized rate of 6.1% in the first quarter of 2010, surpassing analyst expectations and marking the best growth rate since 1999. Economists had expected annualized GDP growth of 5.9% in the last quarter, up from 5% in last year's fourth quarter.
The growth in the first quarter is the third straight quarter of economic expansion in Canada, coming on the heels of three consecutive quarters of contraction. March growth came in at 0.6%, ahead of the 0.5% estimate. 215,900 new jobs have been created in the winter and early spring months of 2010 alone - in the traditional period of time where the Canadian economy is at its most stagnant. With the steps taken to create jobs in the Canadian economy, its recovery remains fragile and job cuts can still be seen in areas that specialize in manual labour. Canada was in a recession during the first two quarters of 2015 average both a decline of 0.1 percent of GDP. Despite the solid financial system of Mexico, the effects of the financial crisis originated in the United States impacted Mexico's export sector by a significant amount considering that 85% of the country's exports go to the United States. Reduced demand, the highest unemployment rate in a decade and the depreciation of the Mexican peso caused analysts to revise growth estimates from 1.8% to somewhere closer to 0% for 2008.
The recession did not show up until 2009, but the recession slowed down in 2008. The country had a positive growth of 1.5% in 2008 compared to a 3.3% in 2007, by 2009 the economy had shrunk by 6.5%, a percentage bigger than that of the 1994-1995 crisis and the largest in eight decades and registering an inflation of 3.57%Economic recovery from the historic downturn started in the late 2009 with exports rising 22.8 percent. The economic prospects for 2010 in the early 2009 were of a positive growth of 3.5 and some saw a steady recovery by the second quarter of 2010. At the end of 2010, the OECD revealed an estimated growth of 4.5 percent while the Mexican government estimated a growth of over 5 percent and the creation of 730 thousand jobs. The estimated growth for 2011 range from 3.9 to 4.8. Despite the sustained growth in 2010, it was not enough to cover up the loss of 2009; as it consists of commodity exporters, South America was not directly affected by the financial turmoil if the bond markets of Brazil, Argentina and Venezuela have been hit.
On the other hand, the continent experienced a tough agricultural crisis at the beginning of 2008. Food prices have increased a lot, due to a lack of arable land. One of the main reasons for the loss of agricultural land was the high value offered by the production of biofuels. Food prices, rising since 2002, ascended from 2006, reaching a peak during the first quarter of 2008. In one year the average price of food rose by about 50%. South American countries were affected by both the global slowdown and the decrease in food prices due to the declining demand. In June 2008, the Economic Commission for Latin America and the Caribbean declared it expected a 4% growth for 2009; however at the end of the year it predicted that the year 2009 would put an end to six years of prosperity during which Latin America has benefited from high raw materials prices. Production in the region is to decline and unemployment to increase. However, the Center for Economic and Policy Research has estimated that the region may be able to cope with the global downturn with the right macro-economic policies, as these countries no longer depend on the U.
S. economy. The table below displays all national recessions appearing in 2006-2013, according to the common recession definition, saying that a recession occurred whenever seasonally adjusted real GDP contracts quarter on