3. What was the value of the unregulated derivatives market at this point in time?
4. Describe the "Securitization Food Chain"
5. What is a "Collateralized Debt Obligation" (CDO)?
6. What role did sub-prime mortgages play in this crisis? Be sure to discuss why
investment banks preferred sub-prime mortgages and what affect it had on their
lending policies.
THE BUBBLE
1. What was the result of the "Securitization Food Chain"?
2.
How much did the sub-prime mortgage lending increase from 1996 to 2006?
3. Who was the main beneficiary of this increase of subprime mortgages?
4. What did the SEC do regarding the investment banks during the bubble? Why?
5. What did the investment banks do with the money that was generated during the
bubble?
6. What role did "leverage" play in the crisis?
7. What is a "Credit Default Swap (CDS)" and who was selling them?
8. What was Goldman Sach's and Morgan Stanley doing with the CDO's and CDS's
9. What role did the three rating agencies play in this crisis? Who paid the rating
agencies and could they have helped to prevent this crisis? If so, how?