In class, we have been talking about some of the causes of the 2008 recession, or the Great Recession. In this article, based off of the recent movie "The Big Short," it explains some specific problems that occurred during the mortgage crisis, and how they are being prevented, for example, making it more difficult to receive a mortgage rather than freely giving out mortgages as it was in the past. However, after getting rid of CDOs, a major factor detrimental to the economy at that time, the economy may be susceptible to facing another mortgage-based issue because of the things that are replacing CDOs may be "seeds" planted by CDOs.
http://time.com/money/4146436/the-big-short-could-it-happen-again/
Yeah I thought I heard about something similar. I wouldn't be surprised. The banks got covered before, and so its hard for them to not be risky if they think they're going to be bailed out again. But I don't know I would like to understand more about how things have changed in the housing market since the 2008 recession.
ReplyDeleteI agree. It's concerning to think how long they got away with it before it all came tumbling down which doesn't reassure us that it won't happen again. However, I think because of the large effects that occurred from these scandals they have implemented ways to help stop it from happening again.
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