2008 Financial Crisis Essay

I think what happened in 2008 should make every single individual that lives in the United States understand that any decisions taken that relates to the future always has risk and uncertainty involved. The argument of this paper points out that a person should be more carful when there is risk involved, since a person can find various ways of being able to control risk. Even though uncertainty about the future may be unexpected, a person who stays away from putting them selves into a high risk on investing for the future, might also be more confidence about the types of uncertainty it can be faced. Some important factors that should have been in consideration during the financial crisis, and something that Lewis does mention in The Big Short is that, during the year of 2008 almost everyone should of paid attention to the probability payoff of the mortgage loans that individuals were getting approved. This would have helped them calculate what benefits or profits will result in the long run.

After the crises ended, the Dodd-Frank-Act evolved from the 2008 crisis to help reform financial regulations and to try prevent a crisis like the one in 2008 from happening again.(Amadeo, 2017). The Dodd-Frank Act is a law that was passed right after the Great Recession in 2008. The law is basically not letting banks like what do to the consumer and lie to people about the mortgage loans they take out and prevent the economy to crash in such a short period of time like it did in 2008. The Dodd-Frank Act is specifically geared towards the bigger banks in the United States, but also many hedge funds. It outlines rules and specifics that these big banks like Morgan Stanley have to follow, it also does not let these big banks to have the ability to own, and invest in hedge funds or private equity funds. (Koba,