Puerto Rico Economic Pulse ©

November 2008: Staring at the abyss, Part I

Causes,consequences, and remedies for the world financial crisis

The world is going through its worst economic crisis in seventy years. The burst of the real estate bubble has already become a volcano eruption that is cracking the foundations of top financial institutions across the world. Even those who predicted the crisis have been baffled by its magnitude. Financial packages, bailouts, and rescue efforts have all failed to halt the lava that is mercilessly engulfing banks, investment companies, and even entire countries. This month’s newsletter reviews the economic events that led to the outbreak of this crisis, an event that is already a milestone in world’s economic history. This is a necessary step to understand what Puerto Rico should expect next year. Don’t miss Part II next month.