Question

If you saw the movie “Too Big to Fail” and please provide a summary essay of the movie and the economic issues it addresses. You must reference the Principles of Economics and appropriate terminology learned in the course to summarize the movie. Discuss your own opinions and draw your own conclusions about the outcome of the crisis in the movie. Your summary essay must be a minimum of 750 words and use proper spelling, grammar and punctuation.         

Answer 1

In the movie Too big to Fail is based on the idea that saving the troubled banks with the collaboration of healthy banks. Leading to the stabilization. It uses all the law and order techniques fir creating a sense of urgency.

President back to Reagan overregulated the financial industry . The available credit was drying up. The plan was to increase the available cash flow. The President of Federal Bank realizes that the market cannot wait for congressional action. He tries to combine consumer banks and investment bank to stablize the things but the things proved to be negative. Afrer the drop down situation in an economy the legislation passes the second attempt, leading to signed law of Emergency Economic Stabilization Act of 2008. After the downfall situation the government tries to save the banks, and the economy from collapse.

A bailout is a situation in which government or any other source tries to help the business who is in a condition of downfall by offering money to stablize the situation. The hazards of bank bailouts should be well addressed before the situation of any financial crises. There are many private companies that uses public backing to reduce their borrowing. Borrowing became too easy. When people were unable to pay their debts they dragged banks with them. Government do help the bank so that they may stabilize the situation.

Finally I would conclude by the following point:-

1.The movie focuses on the stabilize the economy.

2. Emphasize on the merging situation where trouble banks are merged with the healthy banks so stabilize the financial economy.

3. Government do take up the intiative to save the Banks.

4. It reminds us the situation when President George Bush needed votes when most of the republics were saying a no, causing an immediate dropdown.

Answer:--
Financial crisis in 2008 happended mainly due to over optimism of banking institutions. They lend loans to everyone without looking at their financial credibility. The mortage kept for loans were properties and houses. Due to excess money in the market, the housing rates fell. The mortgage kept for loans were of lesser value than the loan amount. When banks had to recover unpaid loans the banks found that the mortgage values were lower and banks made heavy losses. This story was same for many big financial institutions.
Hence recession creeped in the economy.