What happened to make Bear Stearns go out of business?
What are credit default swaps? What role did they play in the meltdown?
What is the Federal Reserve and what role did it play when Bear Stearns was in financial trouble?
What is the Treasury Department and what role did it play when Bear Stearns was in financial trouble?
What is systemic risk? What role did it play in the meltdown?
What is moral hazard? What role did it play in the meltdown?
Free-market capitalism dictates that markets create efficient solutions and businesses that fail should be left to fail. Treasury Secretary Paulson was concerned about “moral hazard” after helping Bear Stearns. What did this mean and why was he concerned?
The film follows people who took out mortgages they couldn’t afford in the hopes that their home values would increase and they would become rich. Were banks incentivized to give these people mortgages? How so?
Should there be laws to restrict the value of houses people buy and the amount of leverage used to buy the house? What is the problem with having such laws in a free market?
Secretary Paulson decided not to guarantee a government loan for Lehman Brothers as he had for Bear Stearns with the JPMorgan takeover. What happened as a result of that decision?
Why did the government give AIG a loan of $85 billion after refusing to loan money for the Lehman Brothers acquisition?
What are subprime mortgages and why were they referred to as toxic assets? What are capital injections? Why were they needed for these toxic assets?
The last scene in the film shows the leaders of the largest banks being told by Henry Paulson that they would have to accept government capital injections. What was the rationale for that decision?
What was the issue with Fannie Mae and Freddie Mac? Why did the government take them over? Did Fannie and Freddie controversy to the Crises or were they a victim of the crises?
In a world in which the rich are becoming wealthier and the poor poorer, bring down employer stability levels and innovative advances, wage disparities are becoming more extensive and ending up additionally difficult to decrease. Where once pay conveyance was viewed as an aggregate duty and was a piece of political objectives, today government mediation to accomplish such appropriation is viewed as a danger to financial efficiency. One proposition for a radical redistribution of pay has been upgraded by Phillippe van Parijis, as a Universal Basic Income (UBI), characterized as "a pay paid by a legislature, at a uniform level at normal interims, to every grown-up individual from society." This pay is paid paying little respect to a person's salary level, conjugal status, capacity to work or citizenship status, as long as he/she is a perpetual occupant. It isn't really a wage sum that would enable a person to deal with the majority of his or her essential needs. Then again, extra wage from work, investment funds or government advantages can be added to it.  It is likewise contended that UBI would give social equity, genuine flexibility for all people, unravel neediness and joblessness arrangement issues. A UBI underpins the jobless by altogether decreasing their money related vulnerability and the strain to acknowledge a vocation that may not meet their ability levels or that they find fulfilling. Essentially it tends to the joblessness trap and the destitution hole, where family unit wages fall underneath the destitution line.  Moreover, a UBI is likewise contended to be "the most effortless approach to completely orchestrate salary security and tax collection and...ensure comparative peripheral assessment rates for both the rich and poor." Additionally, the occurrence of welfare extortion would be decreased if not dispensed with, aside from where people assert essential pay more than once. In poor creating nations, a huge number of youngsters approach tutoring yet don't go to in light of the fact that the poor budgetary circumstances of their families drive their kids to work. A UBI would give adequate wage to give no less than an appropriation of chance, particularly to those with the slightest openings. Ladies excessively bear the work in the family unit which thusly specifically affect their activity and wage choices. A UBI would thusly repay ladies and furthermore ensures them in powerless circumstances, for example, during marriage breakdown. At long last, it is additionally trusted that a UBI would give an individual the flexibility to pick unpaid care work and different self-ruling exercises.  The best issue encompassing the presentation of the UBI is its cost. Parijis contends that the cost can be balanced by the expansion in essential wage, an increment in charges for the working populace, a diminishment in bring down salary impose rates and an abrogation of advantages. Parijis likewise trusts that the majority of the more extravagant countries would now be able to stand to make a commitment to singular salary.  Another contention against the presentation of a UBI is that there would be a lessened supply of work. Parijis contends that by decreasing their working time, families can set aside more prominent opportunity to care for their youngsters and elderly, which over the long haul may diminish open spending on penitentiaries and clinics. A last contention against a UBI is that it "gives the undeserving poor something for nothing", which runs in opposition to the primary of correspondence in which the individuals who get advantages ought to react by making a commitment. John Rawls contends that "the individuals who surf throughout the day away from work Malibu must figure out how to help themselves and would not be qualified for open assets".  However, the state can't pressure people to be gainful, even by lawfully authorizing a commitment to work. Gutmann and Thompson add that the commitment to work applies to the poor and in addition to the rich expressing that: "the individuals who live off acquired riches without contributing their own work to society may merit no more regard from their kindred nationals than the Malibu surfers". In such a case, regard is allowed not by the state but rather by general conclusion. Parijis includes that skilled ability, desire and fortunes are not equally disseminated over a populace and accordingly an unassuming yet ensured money related blessing is a human entitlement. Taking everything into account, a UBI can possibly give social equity and a genuine opportunity for all people. It could essentially diminish neediness holes, joblessness traps and orchestrate salary security and assessment rates over all wage levels, while altogether decreasing welfare extortion. In creating nations a UBI will have the best effect on pay circulation, instruction and flexibility, especially where ladies oversee and nurture the family and family unit. It would likewise bolster people hoping to put their opportunity in unpaid altruistic exercises either broadly or globally. These endeavors would in the end advantage people of all salary levels as more noteworthy time is given to the improvement of answers for issues. The principle contentions against a UBI spin around its cost, correspondence of advantages and diminished work supply and accordingly efficiency levels. On account of the previous, there are a few alternatives accessible going from expanded pay expenses to the annulment of advantages, with the more extravagant countries being more ready to actualize it than the creating nations. With respect to correspondence, it is hard to pressure or lawfully expect people to be gainful as an end-result of advantages got, paying little mind to their salary levels. The main potential arrangement refered to is lost regard for these people by society. While there are numerous contentions against a UBI it the advantages to society and its destitution levels far exceed them, and may turn out to be an answer for overall neediness and unequal pay disseminations. Reference index Blais, Francois and Hutchison, Jennifer (2002) Ending Poverty, James Lorimer and Company Sprout, David et al. (n.d) Universal Basic and Secondary Education, American Academy of Arts and Sciences http://www.amacad.org/productions/ubase_universal.pdf Groot, L.F and Parijs, P. (2004) Basic Income, Unemployment and Compensatory Justice, Springer Honohan, P. (tenth January 1994) Basic Income as a Reform of Tax and Social Welfare, Economic and Social Research Institute Muirhead, Russell (2004) Just Work, Harvard University Press Parijs, Philippe Van (October/November 2000) A Basic Income though: If you truly couldn't care less about flexibility, give individuals an unlimited wage, Boston Review http://www.bostonreview.net/BR25.5/vanparijs.html Wright, Erik (2006) Two redistributive recommendations – widespread essential pay and partner gifts, Focus, Vol. 24, No. 2, Spring-Summer (2006) 1 References  Wright, Erik (2006) Two redistributive recommendations – widespread fundamental wage and partner gifts pg. 5  Parijs, Philippe Van (October/November 2000) A Basic Income though: If you truly couldn't care less about flexibility, give individuals a genuine salary  Parijis (Ibid)  Groot, L.F and Parijs, P. (2004) Basic Income, Unemployment and Compensatory Justice pg. 11  Parijis (Ibid)  Honohan, P. (1994) Basic Income as a Reform of Tax and Social Welfare  Blais, Francois and Hutchison, Jennifer (2002) Ending Poverty pg. 17  Honohan, P. (1994) Basic Income as a Reform of Tax and Social Welfare  Bloom et al. (n.d) Universal Basic and Secondary Education pg. 1  Parijis (Ibid)  Parijis (Ibid)  Parijis (Ibid)  Muirhead, R (2004) Just Work, pg. 19  Muirhead, R (2004) Just Work, pg. 19  Parijis (Ibid)>GET ANSWER