The 2008 financial crisis was a severe worldwide economic downturn that began in the United States. It was primarily caused by the collapse of the housing market, where many people took out risky loans, known as subprime mortgages, to buy homes they couldn't afford. When housing prices fell, many homeowners defaulted on their loans, leading to massive losses for banks and financial institutions. As banks struggled to recover, the crisis spread globally, causing stock markets to plummet and businesses to fail. The U.S. government intervened with bailouts for major companies like AIG and Bank of America to stabilize the economy. The aftermath led to widespread unemployment and a long recovery period.