Money, power, ambition and selfishness are all things that led to the economic crisis on 2008. Businessmen and bankers did everything and used all the power they had to grow the economy and gain more profit. The biggest incentive and greatest motor behind this was money.
MONEY.MONEY. |  |
Cheating. Deception. Anything was part of the G A M E. It was not about morals or doing the right thing but getting the money. The entire problem started with the corrupt bankers who gave out loans to home buyers that didn't have the money to pay them back-- were known as subprime loans.
In first place people started buying homes because they saw an increase in the price, so if they bought a a house now and sold it later, they assumed it would be worth more in the future. So, as people began to buy homes the demand increased and supply as well. Because of deregulation almost anyone was able to buy a home because the lenders were often giving out loans without an extra initial cost, so in the short term it was beneficial to the house buyers. However, later as the interest was charged and the debt increased, the subprime borrowers weren't able to pay back the lender.
But lenders didn't care.
They had passed down the mortgage to investment banks . They didn't have a problem either because they used their money to hire the rating companies to give triple- As to their CDOs (all loans packed together).
But lenders didn't care.
They had passed down the mortgage to investment banks . They didn't have a problem either because they used their money to hire the rating companies to give triple- As to their CDOs (all loans packed together).
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No words.
It's surprising how companies can cheat and manipulate things and get away with it. With the triple-A CDOs investment banks gained a huge advantage. Investors were now interested in buying this triple-A CDOs because they were highly rated and seemed like a good deal. In the end, since the rating was fake, the investors ended up losing money because the house buyers were not paying back. So who loses? 1. The home buyers because they are in huge debts, and 2. the investors, because they invested in CDOs that were toxic assets.
It's surprising how companies can cheat and manipulate things and get away with it. With the triple-A CDOs investment banks gained a huge advantage. Investors were now interested in buying this triple-A CDOs because they were highly rated and seemed like a good deal. In the end, since the rating was fake, the investors ended up losing money because the house buyers were not paying back. So who loses? 1. The home buyers because they are in huge debts, and 2. the investors, because they invested in CDOs that were toxic assets.
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