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The For The Housing Crisis And The Economic Collapse

Decent Essays
The Giant Pool of Money is an episode of the radio show This American Life which originally aired on May 9, 2008. The episode described to a general audience the causes and factors which led to the subprime mortgage crisis. There is about $70 trillion dollars that is circulating in the world today. The $70 trillion dollars refers to that subset of global savings called fixed income securities. The cause of these crisis is the result of investment companies falling in love with securitizing mortgages, taking them and building them into these large pools of loans. Then sell these mortgages to investors. These investors would make this pool bigger by creating adjustable-rate mortgages (ARMs), subprime mortgages, and no-income loans. These loans would allow people to take out home equity loans that they could not afford. This paper is going to address the major issues that lead to the housing crisis and the economic collapse, describe moral failings of the parties involved, and give feedback on how Biblical teachings could have impacted the crisis. Firstly, here are some major issues that lead to the housing crisis and the economic collapse. The financial crisis happened because banks were able to create too much money, too quickly, and used it to push up house prices and speculate on financial markets (Financial, 2015). This is a result of investors wanting more mortgages to make more money. Global investors wanted a low risk investment that paid in return. Brokers would sell
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