the financial crisis of 2007-2009.docx - The financial...

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The financial crisis September 15, 2008- Lehman brothers bank fails Asset bubble - when the price of an asset increases at an unsustainable rate Herding - people follow one another Leveraging - to borrowing money to make an investment 2001 - housing prices, real estate 2001-2008 booming economy Netscape - 1995 Wall street- investment banks Trying new ways to make more money during the turn of the century Dot com boom in 1990s- asset bubble Mortgage backed security (MBS) - securitization Process of combining all types of loans or assets Mutual funds subprime - below average interest rates ARM - adjustable rate mortgages NINA loan - no income, no assets mortgages→ MBS→ Collateralized debt obligation (CDOs)

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