Finance Means A Prediction That The Investments Will Go Down Essay example

707 Words Apr 28th, 2016 3 Pages
To ‘short’ in finance means a prediction that the investments will go down in future. Alternatively, it is an expert guess and analysis of the possible future decline in the line of investments. In this story, we can see the people of high profile with strong financial base predicting the fall of credit facilities and housing bubble before someone else could do so. They were able to use cognitive skills to determine the situation. However the prediction looked more of a game, but it turned out to be true. The banking industry had seen transformation since 1970 when it was viewed boring. Little activities went on within the banking industry by then but in 1990 's, Lewie Ranieri created some backed up securities. These securities enabled the firms and business organizations to put their house mortgage securities into a shared pool. This enabled the mortgage bankers to lend loans to people to allow them to acquire homes at a higher rate. Funny enough this mortgage banking was rated the top irrespective of the United States regulatory bodies realizing the impeding danger. The situation could highly fuel the economic crisis. The story put into light and reveals the greed that some of the street firms had without considering the state of the ordinary citizen. They were quick to lend loan to anybody without taking into account whether the person was able to repay the money back (Zheng, 2010). The film ends with the bankers who created an economic crisis not receiving the…

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