'The Big Short': The 2008 Financial Crisis

"The Big Short" is a film that portrays the events leading up to the 2008 financial crisis, with a focus on the individuals who saw the housing market crash coming and profited from it. The film is based on the nonfiction book of the same name by Michael Lewis, and it provides a detailed and engaging look at the various factors that contributed to the housing bubble and subsequent crash.

One of the most striking aspects of the film is the way it illustrates the complexity of the financial systems that led to the crash. It shows how the actions of a small group of individuals, such as the hedge fund managers portrayed in the film, could have such a significant impact on the global economy.

The film also highlights the greed and negligence

This can happen due to a variety of factors, such as low interest rates, easy access to credit, and speculation. As prices continue to rise, more and more people invest in the market, driving prices even higher.

However, when the bubble bursts, prices drop rapidly and many people who bought properties at the peak of the market are left with properties that are worth significantly less than what they paid for them. This can lead to a decline in housing sales, a decrease in construction activity, and a decline in overall economic activity.

A real estate bubble can also be accompanied by a credit bubble, as people take on more and more debt to invest in properties, and when the bubble bursts, many people default on their loans, which can cause banks and other financial institutions to suffer significant losses, which can further harm the economy.

Real estate bubbles can have a significant impact on the economy, and they are often accompanied by a recession, as the decline in the housing market can cause a decline in consumer spending and investment, which can lead to job losses and a decline in overall economic

This made it easy for people to buy homes, even if they couldn't afford them.

Speculation: Many people were buying homes with the expectation that they would be able to flip them for a profit. This speculation led to an increase in demand for housing, which further drove up prices.

Lack of regulation: Many of the subprime loans that were issued during this time were not properly vetted, and many borrowers were given loans they couldn't afford. Additionally, many of the securities that were created from these loans were not properly rated, which led to many investors buying securities that were much riskier than they realized.

Low interest rates: The Federal Reserve had kept interest rates low to boost the economy after the dot-com bust and 9/11 terrorist attacks, which made borrowing cheaper and further fueled the housing market.

Government policies: Government policies such as the American Dream Downpayment Initiative and the Affordable Housing Goals encouraged lending institutions to make more loans to people who couldn't afford