The world was hit by a major recession in the year 2008, caused in part by a massive housing bubble in the United States. Banks had been lending money to almost anyone (even if they couldn’t afford it) and investors had been assuming that house prices would continue rising.
They were wrong.
Today I want to talk about the financial crisis, the housing bubble, and the man who had been predicting a financial collapse for years. In order to talk about this topic, we need to understand and know how to use the past perfect continuous tense.
Let’s practise the past perfect continuous and learn about the financial crisis!
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Grammar Lesson
The past perfect continuous tense is used to talk about an action that started in the past, continued for a period of time, and was still ongoing or just finished before another action or time in the past.
It emphasizes the duration or ongoing nature of the action. This might sound a little confusing so let’s break it down further.
Take the example sentence
She had been studying for two hours before her friend arrived.
- This action started in the past. The studying started two hours before her friend arrived.
- The action then continued for a period of time. The studying continued for those two hours.
- And the action was ongoing, or just finished, before another action in the past. The studying was still happening up until just before her friend arrived.
Here’s how the present perfect continuous is formed.
Subject (I, you, he, etc.) + had been + the present participle (verb – ing).
He had been studying Japanese for two years before he could have a conversation.
There are always two actions in the past with this grammar. One action is ongoing in the past perfect continuous. and is interrupted or completed by another action in the simple past.
Here are some more examples of the past perfect continuous.
She had been studying for hours before she finally took a break.
- This means that she started studying hours ago and continued studying up until she took a break.
They had been living in London for five years when they moved to New York.
- This means that they started living in London five years before they moved and they continued living there until they moved to New York.
I had been working at the company for 10 years when I decided to quit.
- This means I started working at the company 10 years before I decided to quit and I continued working there up until that point.
Remember the past perfect continuous is used to emphasise how long an action was happening before another action in the past.
It is used to talk about actions that started in the past, continued for some time, and were still happening or just finished before another action or time in the past. It emphasises the duration and ongoing nature of the action.
Financial Crisis and Past Perfect Continuous
In 2008, the global economy was rocked by a massive recession. In fact, the effects of this recession are still being felt today.
A major factor behind the recession was the collapse of a housing bubble [00:05:00] in the United States.
For several years before the 2008 financial crisis, the US housing market had been experiencing an unprecedented boom. Boom in the economic sense means an increase in economic activity, like buying and selling something.
Home prices had been rising rapidly, and many people had been viewing home ownership as a sure way to invest and make money. In other words, everyone wanted to buy a house or multiple houses.
At this time, banks and other financial institutions had been giving out home loans, including risky subprime mortgages, to nearly anyone who applied. Even if a person couldn’t really afford the home, some banks were [00:06:00] still lending them money.
Banks had been combining these risky mortgages into complex financial products, and then selling them to investors around the world. This is a little complicated to understand, but I recommend watching the movie The Big Short to learn more.
Banks often sell loans and debts to investors who then make money from them.
Based on the assumption that the housing market would keep growing and was a safe investment, many investors had been eagerly buying these products full of risky mortgages. Some investors didn’t know these loans were so risky, while others didn’t care as they believed the housing market would continue to grow.
However, by the mid 2000s, the underlying risks had been growing.
Many homeowners with subprime mortgages had [00:07:00] been struggling to make their payments. Despite these warning signs, financial institutions had been continuing to push these risky loans, and investors had been continuing to buy the securities made from them.
When home prices stopped rising and began to fall around 2006, the situation began to unravel.
Homeowners who had been taking out loans they couldn’t afford started to default, not be able to pay their mortgages. Banks and investors, who had been relying on the steady rise in home prices, found themselves holding assets that were rapidly losing value.
By the time the full scale of the crisis became apparent in 2008, the global economy had been severely impacted. Governments eventually had to step in with [00:08:00] bailouts and emergency measures to prevent a complete collapse of the banking system.
Not everyone suffered from the 2008 financial crisis, however. If you have watched the movie The Big Short, you might be familiar with Michael Berry.
Before the 2008 financial crisis shook the global economy, Michael Berry had been analysing the housing market for several years. He had been studying housing data and mortgage bonds extensively since the early 2000s.
Berry had been meticulously reviewing loan documents, scrutinizing the borrowers, and identifying patterns that suggested an impending collapse of the system.
His analysis revealed that many of the subprime mortgages were given to borrowers with poor credit [00:09:00] and were likely to default. In other words, he discovered that the banks had been giving money to people who couldn’t really afford to pay them.
For several years, Berry had been warning his colleagues and other investors about the unsustainable nature of the housing boom. He had been arguing that the rising home prices were based on shaky foundations and that a significant correction was imminent. A correction, in this context, would be a drop in the price of houses.
In anticipation for a collapse, Berry had been developing a strategy to profit from the collapse by shorting the housing market. This involved buying credit default swaps against subprime mortgage bonds.
Essentially, Berry had been betting that the [00:10:00] billions of dollars invested by banks and investors into the housing market, and the mortgages given to the wrong people, would fail.
This was considered a highly unconventional move at the time.
As the housing market continued to surge, Berry had been facing intense pressure from his investors, who were sceptical of his strategy. They had been demanding explanations and questioning his judgment.
When the housing bubble finally burst in 2007, Berry’s predictions were vindicated. He made billions of dollars while many other investors were struggling and banks were on the edge of collapse.
I recommend watching the movie The Big Short to learn more about the financial collapse and Michael Burry.
Final Thought
Today I’ve introduced you all to the past perfect continuous tense. We use this grammar to talk about an action that started in the past, continued for a period of time, and was still ongoing or just finished before another action or time in the past.
After explaining how to form or use the past perfect continuous, I tried to demonstrate the grammar by talking about the housing bubble that led up to the 2008 financial crisis. And then I also talked a little about Michael Berry, the man who had been warning about a financial collapse for years.
Now you have listened to this episode and grammar lesson, let’s practice your English.
First, leave a comment, using the past perfect continuous, on this episode. Make your own sentence using the grammar.
And if you comment on Spotify or on my website, I’ll reply, correct you if you’re incorrect or compliment you if you are correct.
Second, go and download my study pack. There are lots of exercises and activities in the study pack, as well as extra vocabulary, links to a Quizlet class and audio. Plus an entire bonus episode that is only available for Patreon subscribers.
And third, join my Patreon to attend a conversation club where we will practice this grammar or similar grammar and give you plenty of opportunities to practice speaking with people from around the world.
Thank you for listening to this episode of Thinking in English Grammar.
I hope you enjoyed it and I’ll speak to you all next time. Goodbye.
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I had been reading these episodes for about ten minutes before my wife called me to lunch. Anyway, may I use this time in question form, too? If yes, is it natural for native speakers? “Had you been reading my reaction before you answered to it ?”
We can ask it as questions! We often use a statement first, and then the question:
“Sorry I was late yesterday! Had you been waiting long?”
I had been working so many years before I could earn enough money to buy my house. It was dificult, but worth it.
Excellent!