The over-Inflated Bubble

Abstract The financial meltdown of 2008 has etched its place into history. That said, this paper is an falsifiable investigation into the factors that collided to form the perfective card-house that popped and sent the integral Globe into financial chaos. This paper will focus on how grocery ideologies led to risky investments; how subprime lending emerged to inflate the emit; how the take of various financial derivatives aided in bring forward inflating the bubble: instruments that include Mortgage Backed Securities, Collateralized Debt Obligations, and CDO Swaps; and will withdraw just one corporation who heavily invested in the subprime market and the ramifications for the investment. As this paper will show, all of these factors acted to create the perfect formula for a financial meltdown because once the bubble finally grew too big- there was nothing for it to do exclusively too burst. Also, potential solutions to the crisis will be offered as a means to ensure this will not happen once more in the future. Keywords: market ideologies, subprime lending, financial derivatives, collateralized debt obligations, mortgage backed securities, CDO swaps, and solutions.

The Emergences of garish Credit, Market Ideologies, and Subprime Lending: the Makings of a Vicious Cycle The financial crisis began with the emergence of cheap credit but where did this credit come from? In the wake of September 11, 2001 (9/11) and the dot.com bust, Federal Reserve Chairman Al Greenspan lowered interest rates to 1% to help stay on the economy strong in nervous times. Up to 9/11 and following 9/11, the economy had experienced accompanying periods of contraction, meaning there were multiple periods of economic slowdown. It was feared that the attacks would further push back a weak economy into a full pursy recession. Greenspan reacted to this fear by lowering interest rates on lending. While this rate scared off investors from investing in Treasury Bills, it led to banks borrowing money from the Reserve at a... If you want to get a full essay, order it on our website: Orderessay

Order your essay at Orderessay and get a 100% original and high-quality custom paper within the required time frame.