Posted: July 13th, 2022

History Review Assignments | Online Assignment: I need help writing a research paper.

ASSIGNMENT TOO BIG 2 FAIL MOVIE & ESSAY DISCUSSION & RESPONSE

Write a review 5-7 paragraphs of the movie and a comment on another’s response in 3-5 detailed paragraphs in scholarly content that is competent, accurate & relevent and will need no editing in final draft, college level writing. Please answer the questions

PART ONE- In your opinion, Did you like Too Big to Fail/The Big Short or not? Why? What did you learn about the financial crisis of 2008 by reading/watching this work?

PART TWO – Briefly RESPOND to one answer/opinion below in 1-3 paragraphs below? Incidentally, this is the one response to best articulately in scholarly content. Plagiarism sensitive.

I enjoyed the movie “Too Big to Fail” because it was very real and  indicative of the result of the housing boom of the early 2000’s to the bust in 2008 and a lot of Americans, including myself experienced the situation at that time.  Bill Clinton eased the banking lending regulations to the point that almost everyone was able to buy a home.  In previous years, banks would only lend money to consumers with a minimum credit score of 620 with 20 percent for the down payment of the cost of the home.  Once Clinton revived the Community Investment Act and enhanced entities such as Fannie Mae and Freddie Mac as well as HUD (Housing and Urban Development, lending policies for the average American became severely relaxed.  An individual could purchase a house at a 500 credit score with no money down and actually in some instances walk away from the closing table with some money to take home.  As a result, many people felt like they can own a piece of the pie and bought homes in many instances more than they could afford.  A vast number of families have taken out two or more loans on the same home to buy a boat, car or to use the money to buy a larger home which made people feel rich.
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The investment bankers such as Goldman Sachs, Bear Stearns, and Lehman Brothers were confident about the monies they put into mortgage lending and insured the funds with AIG (American International Group) to make sure even if the mortgages go into default, these bankers would stay solvent.  These heavy hitters were making billions from the mortgages because many Americans became aware of the ease of purchasing a home.  Thousands of builders kept building and people kept buying homes as time went by and the economy was flourishing because of the liberal credit rules instituted by the banks.  However, home prices began to plummet which was very unexpected, therefore individuals who had a flexible rate mortgage such as ARM loans, began to suffer because the interest rates rose, people became behind on their mortgages and banks had to foreclose.  These events were a trend and affected millions of Americans which affected banks to dynamic negative financial proportions.  Stocks plummeted well below value and foreigners such as China, Korea, Russia and France lost confidence in their investments in the American finances to the point of distrust.  Meanwhile, many Americans lost their jobs because of the financial crunch suffered by banks affected businesses as large as General Electric because of the lack of funding available to keep  businesses afloat.  The institution AIG was the most affected because the company took on just about everyone’s 401(k) plans, banking mortgage insurances and other investments and couldn’t endure such a crisis.  As a result of AIG’s debacle, the institution had to cut 35,000 jobs alone.

Because of the bursting of America’s mortgage bubble, the government had to step in to create a bailout/merger plan for the banks to survive.  The United States Treasury pumped in $125 billion dollars to purchase stock in the big banks such as Wells Fargo, Bank of America, and Chase Banks with the stipulation that they merge with the likes of the investment institutions of Goldman Sachs and Merrill Lynch so the “toxic funds” can be bought up with deposits and investments held by the mainstream banks.  Also, AIG was given a bailout package of $85 billion dollars which was to be paid back to the Treasury by monies and some of its assets to satisfy the requirement.  Even though the government stipulated that the banks should still lend out a vast amount of money to consumers, they were actually stricter about lending and had tighter limits on loan amounts by staying risk adverse.  Nowadays, there are 11 banks that own approximately 77 percent of all monetary assets in the United States which states that with banks this large and including the most powerful heavy hitters including the government, these institutions are considered “Too Big To Fail”.

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