Introduction Money is the cornerstone of today’s economic system. Money is what makes the world go round. You need money to live, pay bills, take care of family, travel, and ultimately have what is considered the all American Dream. It is everyone’s’ dream to make money and to have it more abundantly. James Adams, in his book, The Epic of America, said,” the American dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement”. The idea of home ownership is the ultimate level of achieving this dream (Adams, 1931). Ethical Issue – Ponzi Scheme The Ponzi scheme named after Charles Ponzi during the 1920 began as a legitimate business until it failed …show more content…
Promise of high return with little or no risk 2. Favorable returns if investors agree to not withdraw their cash 3. Unknown or unclear investments with limited information 4. Restricted access to assets The financial crisis of 2008 was fueled by short term profits made from the private sector, the ability to make large profits, greed and a disregard for economic stability and security. Almost all Ponzi schemes fail because of two of the most the fatal flaws the inability to find new investors and or a large number of those who are invested want to cash out all at once. Causes of Housing Market Crisis 2008 There are several reasons that led to the economic crisis of 2008. In 1998 there was a deregulation of regular banks versus investment banks, because of this it allowed those bank that were FDIC insured to compete in higher risky business. There was a rise in low interest rates over an extended amount of time and asset managers looked for inventive ways to make money. Agencies whom assigned credit ratings to these companies claimed that they were safe by issuing AAA ratings. AAA ratings were the best that these companies could receive as a result the companies that had these ratings fund managers conducted inadequate research before buy