Financial crisis can be described as severe contraction of liquidity in global financial markets. The 2006-2008 financial crises originated in the United States and were regarded in the US as the worst economic down turn since the depression of 1933. The financial crisis was caused by a number of factors including the housing market crash. The 2006-2008 financial crises resulted in bankruptcy for many financial institutions. It was a global financial and economic collapse that cost many people their jobs, their life savings, their homes, or all three. Many people lost their homes due to foreclosures because they lost their jobs and could not pay their mortgages. Banks were failing and needed a bailout. There was a high unemployment. Because the Fed anticipated a mild recession, it reduces federal fund rate 11 times between May 2000 and December 2001 from 6.5% to 1.75%. This reduction enabled banks to extend credit to customers at a lower rate. Consumers including high-risk customers (people with poor or no credit history), started taking advantage of the cheap credit to purchase durable goods including houses. The rush to buy houses created the housing bubble, which led to an increase in house prices above their intrinsic value.