the big short

the big short

The Financial Crisis of 2008

Hannah Dexheimer

Oshkosh West High School

Mr. See

Pre College English

14 January 2014

This research shows few of the many factors that played a very big role in the stock market crashing.  What were the things that played a role in the stock market crashing?  Subprime mortgages had the biggest effect.  They put the market in a great amount of debt from crashing.  Rating agencies ruined their reputations and were toxic.  Collateralized Debt Obligations didn’t have a stable market to begin with and were doomed from the start. Credit Default Swaps were extremely popular to begin with but unorganization of keeping record is what ruined them.  Sources all agree with Lewis that these were the main four factors to really contribute to the market crashing.  As a result, the sources all said the same thing Lewis was saying.  Reports also believe that if we are not careful in our economy, history can and will repeat itself.   
Keywords:  CDs, CDOs, Subprime Mortgages, and Rating Agencies.

The Financial Crisis of 2008
The Big Short is a story.  It is a story about the few number of people who saw a financial tsunami coming and started waving their hands and shouting.  The subprime mortgage bond market that had been created got even more complicated with the beginning of the credit default swap and collateralized debt obligation.  These systems were designed to help spread the risk associated with subprime mortgage bonds but they ended up bringing the entire system down.  The crash started with the collateralizing of subprime mortgages into packages of mortgage backed securities.  Then they created credit default swaps as insurance on these mortgages.  Once they ran out of things to categorize, they created side bets with credit default obligations.  To judge from their behavior, the rating agencies worried about was maximizing the number of deals rated from Wall Street and...

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