Throughout this week, we have peeled back the outer layers and dug deeper into the specificity of the various white collar crimes that have occurred in the United States and abroad. This week’s assignment was to watch the documentary titled “The Inside Job”. The documentary discusses the 2008 financial crisis and how not a single top level executive had been held accountable and charged with a crime.
During the documentary, the deregulation of the financial market is discussed and how it played a significant role in leading to the financial crisis. Deregulation led to the 2008 economic crisis due to derivatives and predatory lending. Derivatives were made to stabilize the economy but ended up doing the exact opposite. Predatory lending contributed …show more content…
When the people defaulted on their mortgages, the market drastically declined and created a devastating domino effect to the United States and Global economy. Subprime lending and the mortgage backed securities or “MBSs” contributed to the economic crisis and the deregulation of the financial market permitted this to occur. Due to deregulation, the mortgage backed securities are bundles of mortgages that contained subprime loans issued to people that may not have enough income to support the loan, little or poor collateral, and credit scores that were typically under 640. These predatory loans also carried a higher interest rate. The higher interest rates combined with the unverified income and other factors created a recipe for disaster for the housing economy. The market became a ticking time bomb and in 2008, the timer reached zero and the market came crashing down. Also, the documentary described a nationwide Ponzi scheme titled “The Bubble”. “The Bubble” portion of the documentary describes the Ponzi scheme that involved the housing market and the amount of money banks were lending compared to the amount of assets they possessed. The amount of …show more content…
This is mainly due to them being the first in line in the education of some of the people that participated in the illegal and unethical behavior. It was at the Universities that class after class, students were taught the ins and outs of the economic system and how to do the various things they did that led to the economic crisis. The Ivy League institutions have an agenda and a strong interest in the financial success of their students. The students who go on to make significant salaries and get into positions of influence are the ones who donate most to the Universities and hire more people from them. This creates a constant revolving wheel of funding for the
During the documentary, the deregulation of the financial market is discussed and how it played a significant role in leading to the financial crisis. Deregulation led to the 2008 economic crisis due to derivatives and predatory lending. Derivatives were made to stabilize the economy but ended up doing the exact opposite. Predatory lending contributed …show more content…
When the people defaulted on their mortgages, the market drastically declined and created a devastating domino effect to the United States and Global economy. Subprime lending and the mortgage backed securities or “MBSs” contributed to the economic crisis and the deregulation of the financial market permitted this to occur. Due to deregulation, the mortgage backed securities are bundles of mortgages that contained subprime loans issued to people that may not have enough income to support the loan, little or poor collateral, and credit scores that were typically under 640. These predatory loans also carried a higher interest rate. The higher interest rates combined with the unverified income and other factors created a recipe for disaster for the housing economy. The market became a ticking time bomb and in 2008, the timer reached zero and the market came crashing down. Also, the documentary described a nationwide Ponzi scheme titled “The Bubble”. “The Bubble” portion of the documentary describes the Ponzi scheme that involved the housing market and the amount of money banks were lending compared to the amount of assets they possessed. The amount of …show more content…
This is mainly due to them being the first in line in the education of some of the people that participated in the illegal and unethical behavior. It was at the Universities that class after class, students were taught the ins and outs of the economic system and how to do the various things they did that led to the economic crisis. The Ivy League institutions have an agenda and a strong interest in the financial success of their students. The students who go on to make significant salaries and get into positions of influence are the ones who donate most to the Universities and hire more people from them. This creates a constant revolving wheel of funding for the