Explain the various possible causes of the 2008 financial collapse. In your opinion, what, if anything, should the American government do to prevent future collapses?
You should minimally address the following questions:
Who is Blythe Masters and for which firm did she work?
What are Synthetic CDOs? a) How are synthetic CDOs related to CDOs and CDSs??
How could the above instruments lead to moral hazard (taking on more risk because you or the firm are shielded from bad consequences)?
Explain why some economist and financial analyst have called the above instruments part of the Dark Market or Shadow Market? a) What are your thoughts on derivatives, should they be regulated? How? b) What type of enforcement or penalties would discourage financial abuses?
Some films that could demonstrate the financial concepts: The Big Short (2015) Too Big to Fail (2011) The Flaw (2011) Margin Call (2011) Inside Job (2010).