The financial crisis of 2008 primarily stemmed from the collapse of the housing bubble in the United States, which was fueled by lax lending standards, speculation, and risky financial products like subprime mortgages. As housing prices began to fall, many homeowners defaulted on their loans, leading to significant losses for banks and financial institutions heavily invested in mortgage-backed securities. The resultant credit squeeze caused panic, leading to failures or bailouts of major financial firms. This crisis had a ripple effect globally, resulting in severe economic downturns, massive job losses, and a reevaluation of regulatory practices within financial markets.