While most of us have a vague notion as to the origins of the global financial crisis‚ the detail remains a mystery to those outside the financial sector and not conversant in economic speak. Among the many attributes of this distinguished documentary‚ winner of the 2010 Academy Award for ‘Best Documentary Feature’‚ is its capacity to deconstruct the complex and often nefarious operations of the private financial sector and make them accessible to the ‘outsider’. It more than matches its claim to
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AIG began to invest in various types of securities‚ including credit derivatives and mortgage backed securities. Because of AIG’s excellent credit rating‚ it became a major player in these markets‚ insuring others’ debt obligations against losses. In 2007‚ AIG recorded a $5.5 billion writedown on its investments. Furthermore‚ AIG’s operating divisions held a total of $84.8 billion worth of investments in mortgage backed securities‚ about 10% of AIG’s total invested assets. As a result‚ they had a
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CAUSES OF GLOBAL FINANCIAL CRISIS The Global Financial Crisis that struck in mid-2007 has had cascading effects around the globe since its occurrence. The crisis resulted in the threat of collapse of large financial institutions‚ downturns in stock market‚ foreclosure‚ prolonged unemployment and many more negative impacts. There have been numerous perspectives regarding its causes; while some attribute it to the failure of the policymakers; others blame it on financial institutions. Whatever the
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entered the home mortgage market to bolster the struggling US economy. This is when the U.S. government systematically instituted segregation into the housing market through policies which favored white mortgage applicants over minority mortgage applicants. In response to this lending crisis of the Great Depression‚ President Franklin D. Roosevelt signed legislation in 1933 to create the Home Owners’ Loan Corporation (HOLC)‚ and subsequent programs to subsidize the cost of mortgages. The HOLC provided
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many articles on economic aspects going on in various markets. The Housing Market Paradox is an article on the US News website by Andrew Soergel (Economy Reporter) dated September 20‚ 2016. In the article‚ the economist explains how there were low mortgage rates in the past and also interest rates which were near-zero which on his opinion theoretically would have created a housing market characterized by a perfect storm. The housing market prices just like the price of good and the services of other
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downturn in the US‚ as a result of the Global Financial Crisis has had significant effects on other world economies. Over the 100 years ago‚ the world economy has been going through‚ more or less continuously‚ a series of strains and stresses in the current wave of globalization. Until recently‚ however‚ most of the downside risks of globalization have been borne largely by the developing world. The global financial crisis (GFC) or global economic crisis is commonly believed to have begun in July 2007 with
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intermediation. In the US‚ prior to the 2008 financial crisis‚ the shadow banking system had overtaken the regular banking system in supplying loans to various types of borrowers; including businesses‚ home and car buyers‚ students and credit users. As they are often less risk averse than regular banks‚ entities from the shadow banking system will sometimes provide loans to borrowers who might otherwise be refused credit. The 2008 financial crisis exposed the systemic risk associated with Shadow Banking
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existence the company became the fourth largest financial firm in the world. Before announcing bankruptcy on 15th of September 2008‚ they were providing full range of financial services. (See Exhibit 7) Lehman Brothers was tangled after the sub-prime mortgage disasters happened. The firm accumulated a very large commercial real estate portfolio. Lehman was also very highly leveraged and was taking no steps to get borrowing under control. On September 7th 2008‚ after the Government rescued Freddie Mac
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opportunities to stop the fraud‚ to focus on Ponzis and investment advisor fraud. Lehman Brothers: Investment bank Lehman‚ with $600 billion in assets‚ failed in late 2008. It was the largest bankruptcy in history and a spark to the worldwide financial crisis. A bankruptcy examiner’s report concluded there were "colorable" claims against its top executives and its auditor‚ Ernst & Young‚ for fraud‚ but neither the SEC nor the DOJ have so far filed charges. Cendant: Shortly after the company was
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York. 2) The Securities and Exchange Commission (SEC) alleged that Goldman Sachs acted unethically by providing investors with misleading information related to a collateral debt obligation (CDO) which was linked to the performance of subprime residential mortgage backed securities (RMBS). Connection to Our Topic: Companies who are led by CEOs who are also company founders or who act like the company belongs to them are more likely to commit unethical acts 1) The case is not directly linked to our
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