Causes+of+the+bailout

Causes  of the bailout What got us into this mess?

 The Subprime Mortgage Crisis Explained



 //But why did it affect banks? Isn't it just referring to how people lost their houses and how the housing market crashed?//

The investment banks still have a bunch of **collateralized debt obligations** (securitized mortgages - mortgage backed securities - with varying amount of risk), and the how much these are worth of these is extremely questionable. If these are not worth anything, then **the majority of banks would essentially be bankrupt** - they would owe more than they had.


 * The companies** that bought some CDOs from investment banks may also have lost the majority of their investments - since these securities rely on mortgages being paid and if mortgages are not paid the worth of the assets go down.


 * So the customers, the investment banks and the investment companies were all in a lot of trouble.**

  SUMMARY 

A brief summary to clarify some points made in this section media type="file" key="WH FINAL PROJECT FINANCIAL CRISIS PODCAST.m4a"

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