Resume
Summary 'Panic'
- Établissement
- Universiteit Antwerpen (UA)
Dit is een beknopte samenvatting van de film Panic. In de laatste pagina's staat ook het bijhorende Unit 11 samengevat.
[Montrer plus]
1 vérifier
Par: charlotteeeee • 2 année de cela
Aperçu du contenu
PANIC - THE UNTOLD STORY OF THE 2008 FINANCIAL CRISIS1. Introduction
Players:
o Hank Paulson: dealmaker, word is bond
o Ben Bernanke: economist professor Princeton
o Tim Geithner: government guy, worked on global financial markets
After crisis:
+ rebound economy
- way public understand crisis: distrust government and institutions => °populism in politics today
2006: Josh Bolton: chief of staff -> needed to refresh cabinet
o President Bush
o Paulson: secretary of treasury, former leader Goldman Sachs
First turned down bcs fear of failure (worked for Nixon during Watergate)
o Bernanke: chairman federal reserve
o Geithner: President New York fed (federal reserve’s eyes and ears on wall street)
Bear Stearns: first indication of what looks like = crisis of confidence
Owned huge piece of housing business, but took on great risks -> investors wan money out
Homeownership: shelter -> investment
o Mortgage-backed securities: take mortgages, package up -> sell cashflows
o SO investor buy portion of all mortgages -> mortgages would pay investor
=> less risky bcs investing in lot of people
Early 2000’s: price loan very low, attractive (exotic loans)
Stated income loans: say what u earn but no one checks (liar loans)
=> demand >> supply: people buy houses -> flip -> sell
BUT Wallstreet takes everything to extreme: everyone makes lot of money -> pressure to keep going
+ believe home prices never drop (national bubble -> implications for whole econ)
Risk out of control -> keep inventing product to make profit
Consequences:
o House prices fall -> economy slows
o Default on mortgage payments -> people lose homes
2. 2008
Little transparency/confidence in securities => financial institutions struggling
Bear Stearns failing BUT interconnected -> if they fail, international financial system in trouble
o Extend loan to non-bank (investment bank) Bear, taxpayers pay out
o First bail out: Fed finance 30bil, JP Morgan rest (bcs won’t buy whole Bear)
JP wants Bear, but split ‘trash’ with fed
o Bad communication: public not convinced that bailout not for Wallstreet, but American
people
o Don’t stop bleeding at source, Wallstreet -> u kill econ
Bush: not popular by public <-> Obama/McCain: tap into popularity
BUT solve crisis = always use bad politics
=> Clash between politics and markets
, Fannie (Mæ) and Freddie (Mac): backbone US mortgage market, politically powerful
o Publicly traded BUT idea that government sponsored, government behind debt -> will
support if default but not stated on paper
= the implicit guarantee
o Huge losses: Paulson asks congress enough money to calm markets
o Hearing = theater, senate wanted to get elected
- Statement Paulson: “by having smth that unspecified -> increase confidence -> reduce likelihood to
be used” => got money, got “bazooka”
BUT most aggressive investors lot faster to fearful than expected -> needed to use ‘bazooka’
o In discretion bcs congress wouldn’t allow
o McCain used bail out for campaign <-> Obama: trust Paulson
Geithner: experience previous crisis across world -> °panic: use excessive force -> convince people
it’s safe not to run
Lehman brothers (investment bank): huge amount of real estate -> everyday marked down
But government can’t put in capital, can’t be in bailout money
o 2 potential buyers: bank of America/ Barclays (British bank)
BUT bank of America purchased Merryll lynch
=> depends on British government: don’t allow
o Meeting: top executives important banks (JP Morgan, Goldman Sachs, City groups, Merrill
Lynch, Morgan Stanley). What happens if Lehman goes down? Buy Lehman partly/in whole
=> Lehman’s filed for bankruptcy: not savable (if it wasn’t them, would MS/else bcs bad
fundamental)
o Liquidity problem: bank interlending market drying up (businesses who count on customers
lending for expensive product -> problem)
o Quickly Wallstreet -> mainstreet
=> Closing down of markets: people stop investing/spending
AIG: largest insurance company BUT need immediate funding
o Loan fed to AIG: value insurance companies as collateral
o Remaining independent investment banks: Morgan and Goldmans very vulnerable
=> Paulson pushing Morgan to get external financing
o Need capital injection but would look like government nationalizing banking system
=> buy troubled asset = TARP = troubled asset relief program
“700bil dollar bailout of Wallstreet”
=> not give needs in 72h? Whole American fin. qystem fails + world
McCain suspends campaign to go to Washington -> help solve crisis (<-> Obama not agreed)
=> economy/politics collided
o Not well received
=> meeting Bush, Obama, McCain: ‘high stakes drama’
o McCain not much to say, didn’t think approach through (only thought 1 move ahead)
o Meeting = disaster -> °distrust population
Getting TARP: 4 sticking points oa compensation
Do smth for Wallstreet, they should be willing to sacrifice
But to pay = to acknowledge that u messed up
Paulson panic attack -> can’t come out: market can’t handle
BUT sped up deal
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur studentHI2. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €2,99. Vous n'êtes lié à rien après votre achat.
Peut-on faire confiance à Stuvia ?
4.6 étoiles sur Google & Trustpilot (+1000 avis)
73091 résumés ont été vendus ces 30 derniers jours
Fondée en 2010, la référence pour acheter des résumés depuis déjà 14 ans