1. Based on the documentary, how was the global financial crisis a threat to the economic system in the US?
Banks, hedge funds, insurance, brokerages, companies and mortgage lender are the largest sector of the US economy. This was 3x larger than any other industry in America. If you want a strong economy you must have financial services that are able to lend money, this depended on the strength of the global economy due the invention of Credit Default Swap which was packaged whole segments of loan portfolios from multiple companies throughout the world. This allowed the US banking take more and more risk based on a falsified practices.
2. Based on the documentary, do you think there should be increased regulations on the financial service companies located on Wall Street? Why or why not?
Yes I do, because were no regulations the idea of derivatives were created. It wasn't able to been seen by the market, like the stock exchange no one could see the positions which allowed the banks to sell high risk debt, to create more high risk debt. The goal of the improved regulation should be increased to protect creditors and investors from losses arising from the insolvency of financial institutions owing those amounts, while ensuring stability within the financial system.
3. Discuss the culture of wall St. and how it may or may not have contributed to …show more content…
This is a clear indication how out of control they were. Wall Street knowingly manipulated the financial system and politicians in Washington to take advantage of homeowners and mortgage investors alike, intentionally jeopardizing the financial system while enjoying huge personal gains from toxic waste loans. Because wall St. sold so many unstable investments generating huge profits people were able to buy everything at artificially, producing even more funds to put into housing. Which created a vicious cycle fueled by Wall
Banks, hedge funds, insurance, brokerages, companies and mortgage lender are the largest sector of the US economy. This was 3x larger than any other industry in America. If you want a strong economy you must have financial services that are able to lend money, this depended on the strength of the global economy due the invention of Credit Default Swap which was packaged whole segments of loan portfolios from multiple companies throughout the world. This allowed the US banking take more and more risk based on a falsified practices.
2. Based on the documentary, do you think there should be increased regulations on the financial service companies located on Wall Street? Why or why not?
Yes I do, because were no regulations the idea of derivatives were created. It wasn't able to been seen by the market, like the stock exchange no one could see the positions which allowed the banks to sell high risk debt, to create more high risk debt. The goal of the improved regulation should be increased to protect creditors and investors from losses arising from the insolvency of financial institutions owing those amounts, while ensuring stability within the financial system.
3. Discuss the culture of wall St. and how it may or may not have contributed to …show more content…
This is a clear indication how out of control they were. Wall Street knowingly manipulated the financial system and politicians in Washington to take advantage of homeowners and mortgage investors alike, intentionally jeopardizing the financial system while enjoying huge personal gains from toxic waste loans. Because wall St. sold so many unstable investments generating huge profits people were able to buy everything at artificially, producing even more funds to put into housing. Which created a vicious cycle fueled by Wall