Risk is the exposure to danger to achieve a goal or commitment. There are many reasons why we risk our lives, our character, our reputation, and our finances. An important factor of that risk is if it was assessed? Is it calculated risk or are you taking the proverbial leap of faith off the 2,000-foot cliff? The 2007 Financial Recession was considered a dilution of calculated risk by many professional investors and entities. These individuals were paid enormous amounts of money to make calculated risk decisions based on the risk assessments of their clientele. Was the Recession created by a perfect storm effect or was it due to individuals failing to keep an eye on the details by focusing more on the results and rewards? The American
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The real estate agents were creating social capital and therefore could streamline their customers into homeownership which was better for business and their pockets. Banks were finally able to capitalize on their list mortgage vehicles including their secondary loans while emptying their housing property books. Furthermore, they could double down on home owners by providing an investment vehicle to stock holders that bundled both prime and sub-prime loans together that was lucrative and appealing with a triple A rating. The effect was catastrophic these higher risk loans were turning into dead money because the common middle class worker could no longer afford their loans and would foreclose on the loan and claim bankruptcy. Those bundled investment vehicles were created through subsidies which was the catalyst to the destruction of the system. The banks were taking hits on both sides losses through loans and loss on the stock market. The stock market took the most severe loss since the Great Depression because the big banks were so intertwined in the market on both main street and wall …show more content…
The fact individuals bypassed what they knew to be wrong in the back of their minds is the reason for the financial collapse of 2007 better known as the Great Recession. Our world is much smaller than it once was due to technology and financials being constant in this new world order. The free-flowing idea of risk is no longer; now risk is back to its original form a calculated exposure to such dangers. This definition of risk is considered much more tangible due to the world’s experience of the USA’s Great
The real estate agents were creating social capital and therefore could streamline their customers into homeownership which was better for business and their pockets. Banks were finally able to capitalize on their list mortgage vehicles including their secondary loans while emptying their housing property books. Furthermore, they could double down on home owners by providing an investment vehicle to stock holders that bundled both prime and sub-prime loans together that was lucrative and appealing with a triple A rating. The effect was catastrophic these higher risk loans were turning into dead money because the common middle class worker could no longer afford their loans and would foreclose on the loan and claim bankruptcy. Those bundled investment vehicles were created through subsidies which was the catalyst to the destruction of the system. The banks were taking hits on both sides losses through loans and loss on the stock market. The stock market took the most severe loss since the Great Depression because the big banks were so intertwined in the market on both main street and wall …show more content…
The fact individuals bypassed what they knew to be wrong in the back of their minds is the reason for the financial collapse of 2007 better known as the Great Recession. Our world is much smaller than it once was due to technology and financials being constant in this new world order. The free-flowing idea of risk is no longer; now risk is back to its original form a calculated exposure to such dangers. This definition of risk is considered much more tangible due to the world’s experience of the USA’s Great