Audio available in app
The rise of subprime mortgage lending from "summary" of The Big Short: Inside the Doomsday Machine (movie tie-in) by Michael Lewis
The financial world had found a new toy to play with: subprime mortgage lending. It was an idea that seemed to make sense at the time - give loans to people who wouldn't traditionally qualify for them, and watch as the profits rolled in. But as with many things in finance, the reality was far more complex than it seemed. Subprime mortgage lending was built on a shaky foundation, with borrowers who had little to no chance of paying back their loans. But the banks didn't seem to care - they were making money hand over fist, and that was all that mattered. They bundled these risky loans together and sold them off to investors, who were eager to get in on the action. As the subprime mortgage market grew, so did the greed of those involved. Lenders were pushing loans onto p...
Similar Posts
In the short run, output deviates from potential output
In the short run, the level of output in an economy may not always align with its potential output. Potential output refers to ...
Individuals must take responsibility for their actions
In the world of finance, decisions are made every day that have far-reaching consequences. The individuals who make these decis...
The consequences were farreaching
The consequences of the financial crisis were not contained within the borders of the United States. The impact of the collapse...
The incompetence of credit rating agencies
Credit rating agencies were the supposed experts who were supposed to assess the risk of mortgage-backed securities. They were ...
The financial system is on the brink of collapse
The signs were there, for those willing to see them. The cracks in the system were becoming more pronounced with each passing d...
The lessons learned from the collapse
The collapse of the housing market in 2008 revealed some hard truths about the financial industry. One of the key lessons learn...
The rise of subprime mortgage lending
The financial world had found a new toy to play with: subprime mortgage lending. It was an idea that seemed to make sense at th...