What the H*&##*!&! Happened to the Economy?

Here are the initial questions you all were interested in learning more about.  (PS, note that this is the first use of the “What is Going On”category which is different from our blog posts about organization theory.

  • What was the role of derivatives and securitization of risk-related products? (What is a risk-related product?  Do you mean securitization of risk?)
  • Why do companies put so much emphasis on share price?  Did that lead to misleading financial statements and the collapse of firms?
    Same person: Did consumer patterns in US influence this recession?
  • How can housing bubble issues be changed for the future to prevent problems?
  • I would like to know if there have been any new regulations that banks must abide by when giving out loans or if these policies remain the same.
  • What exactly determined which financial organizations received bail outs over others?
  • What were some of the first signs and in noticing these, what could have been done as far as organizations getting involved?
  • I would like to know who got hit the hardest?
  • I would like to better understand the recession in relation to past recessions.
  • Creation of the banks’ incentive system for loans given out (by managers).  Why?  How was it meant to function? [I think you mean how was the incentive system put in place by mangers supposed to function?]

Same author: Or the logic of the political decision to make banks give loans to people who would not normally qualify.  { I think you mean either the Community Reinvestment Act and/or the role of Freddie and Fannie Mac?  Otherwise, how did a political decision drive loan practices?]

  • I want to know more about why there so few regulations about trading derivatives and others [other what?]  Also, if there were regulations, why did everyone look the other way?
  • What else caused the collapse besides the sub prime mortgages?
  • What regulations expired to allow this to happen and what regulation will be placed in the future to stop a recurrence?
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