Subprime lending

crazy to think that over a decade has passed and the country still has not fully recovered. Prior to reading these articles, I knew very little about the financial crisis and all its consequences. I was aware the financial crisis was due to banks lending out loans to less qualified borrowers. As a result, these borrowers couldn’t pay back their loans to the banks causing a huge economic downturn and the closing of several multinational banks. I knew the downturn of 2007 was bad. However, I did…

Thus, the film provides various scenes which frame the causes leading to the default of the housing market as well as the responses from different characters. The causes are of how the dilemma began and what the dilemma consisted of. For example, the quote “if you give us free money, we will take it”, depicts the banks attitude towards Burry. The banks assume that Burry does not know what he is talking about as he proposes to bet against the housing market. To them Burry is just giving his…

Nhu Nguyen History 8 The Big Short The Big Short It's been awhile since I've seen a movie about finance “The Big Short”.I remember a financial student who told me that: the capitalism in which capital is not easy to understand, easy to play and easy to own. Notwithstanding, I have never imagined how difficult it was and how badly these rules played out. Thus, “The Big Short”, apart from in-depth analysis the 2008 US financial crisis in real estate and stock, my knowledge about capitalist…

Hanson highlights two significant shortcomings regarding critical thinking in his article on spending, the failure to clarify the concern and the failure to fully evaluate information. This essay will analyze how these shortcomings allowed Mr. Hanson to project how he feels the world may view the United States in the future. According to Dr. Gerras, “critical thinking is the deliberate, conscious, and appropriate application of reflective skepticism.” Leaders, regardless of career field, are…

If one is to turn on the news or pick up a newspaper one will most likely find a major article or coverage about a street crime that was committed not long ago and that only affected a few people. However, while street crime only causes relatively low amount of financial damage, white-collar crime yield a higher loss of capital. Nonetheless, the American justice system has primarily focused on halting street crime offenders while comparably ignoring white-collar crime offenders. Also, not only…

The Dodd-Frank Act and its Consequences for the Financial and Banking System The Great Recession of 2008 brought to light a number of weaknesses in the United States economy that allowed for the stock market crash, housing crisis, and necessitated the bail-out of several important banking companies. In response to the recession and fears of a potential repeat of events, President Barack Obama signed the Dodd-Frank Wall Street Reform Act into federal law in 2010. The act brought with it the most…

poor financial rating, it may seem that his dreams of buying his own house are unattainable. However, now, there are many lenders specializing in providing special programs to people with poor score. A poor credit score indicates a higher risk of lending. The interest rates on these programs are therefore exorbitantly high. But these mortgages not only help you buy your own house but also help you in improving your credit rating provided the monthly payments are made on time. How Does Your…

The 2008 Global Financial Crisis is considered the largest monetary disaster since the great depression of 1929. According to Ben Bernake, it might have a resulted in 1930s style global financial and economic meltdown with catastrophic implications. In 2000s, global investors were searching for a low risk, high return investment, and so they started to throw their money at the United States housing market. However, global investors feel trouble to deal with individuals. Instead, they bought the…

Mortgage originators outwitted borrowers about the terms of the loans and sold them to borrowers who were unable to pay due to give the amount of wealth they accumulated. Banks bundled up the mortgages into Mortgage backed securities without further assurance of what they are doing is right or not. Issuers of mortgage backed securities made false claims about their assets and created frauds when selling them to clients and others. Profits were made so why stop? The amount of wealth given to the…

The real estate scene in Houston, Texas was shook to its core from 1981 to 1984 when people suddenly began moving away. Within three years, 210,000 people had left the city, causing retail real estate and housing prices to plummet in response to the lack of renters and buyers. Houston later recovered by becoming the nation's energy capital, drawing residents back, and boosting up the real estate market. Today, Houston is no longer the single-industry town it once was, keeping the real estate…