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The lessons learned from the collapse from "summary" of The Big Short: Inside the Doomsday Machine (movie tie-in) by Michael Lewis
The collapse of the housing market in 2008 revealed some hard truths about the financial industry. One of the key lessons learned was the danger of blindly trusting credit rating agencies. These agencies, such as Moody's and Standard & Poor's, were supposed to provide unbiased assessments of the risk associated with mortgage-backed securities. However, it became clear that they were giving inflated ratings to these securities in order to keep their clients happy. Another important lesson was the folly of assuming that housing prices would always go up. Many investors and financial institutions made the mistake of believing that the housing market was invincible. They failed to consider the possibility of a downturn, leading them to take on excessive risk. When the bubble b...
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