Question

(Please answer the question based on the movie "The Big Short.". Thank you.)

1.From the movie, what were the major reasons for the 2008 Great Recession?

2. One character specifically blamed a lot of the issues on “big banks”. Do you believe that the big banks are completely responsible for the near economic collapse? Why or why not?

3. What is something that you can personally take away from this movie?

4. What do you think might be the next issue in our economy (not related to COVID 19)?

5. Who was your favorite character and why?

Answer 1

1. The major reasons for 2008 financial crisis was unprecedented lending without background checks and backed by mortgages backed securities which led to housing boom collapses and led to bankruptcy of financial sector.
2. Big banks relentlessly lended loans without risk management practices and created excessive hit money into system without looking for default risks. Moreover regulations and corporate governance was breached and many regulators failed to check the malpractice and alarm them at right time.
3. Personal takeaway here is to understand banking norms before buying any products and read its terms and conditions to avoid fatalities when banks fail miserably and thus cover your losses.
4. The next big looming issue into economic growth story is rising risk aversion due to Bitcoins and cryotocurrency which are unregulated and are booming like bubble and can crash anytime in future if IMF and World bank norms change.
5. The favourite characters in movie is played by Leonardo De Caprico who was short seller and made profits and his resilience, persistence and wit with phenomenal acting made the movie more astounding.

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