THE 2008 FINANCIAL CRISIS / LEHMAN BROTHERS
Episode 228 | Historical Events
In this History episode we focus on the 2008 financial crisis — the mortgage-backed securities, the credit rating agencies that rated them AAA, Lehman Brothers' $613 billion bankruptcy, the bailouts that saved the institutions, and the 3.8 million American homeowners who lost their homes. We trace the specific mechanism: the separation of origination from risk that removed incentive for lenders to assess borrower creditworthiness; the CDO structure that theoretically diversified risk but practically concentrated it in ways the models didn't capture; and the…
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