Econ
Questions based on “Too Big to Fail” movie Watch the movie and answer the following questions briefly. Upload your answers on Moodle using the Link “Submit Assignment on Too Big to Fail here”
1. When Lehman brothers was in trouble, Henry Paulson called the other banks’ CEOs on a meeting to find a solution to Lehman Brothers’s problem? Why did Henry Paulson think that a private sector solution, instead of government bailout, was needed?
2. (Up to about 43:00 of the movie) Why did the Lehman Brothers sell not work out? Why did Paulson want Lehman Brothers to file Bankruptcy before markets opened?
3. Why did the markets in Europe and the USA still panic after Leman Brother’s bankruptcy?
4. (From about 53:00) How does the real economy (industries/corporations) get affected by a financial sector panic? You can use the example of General Electric as shown in the movie.
5. (From about 42:40) Why couldn't the government let AIG fail? How was AIG entangled with the entire global financial market? Why would the other major banks go under if AIG failed?
6. Many people argue that the govt. should have bailed out the homeowners by directly giving monetary support to the homeowners, not to the big banks who had messed up with people's money. They argue that in that way homeowners would not have to go for foreclosures and home-price would not fall, and that would save the banks' balance tables too. Why do you think the system could/couldn't be saved that way?
3
Questions based on the movie Inside Job
Background: Although the basic function of financial markets is straightforward – to match people who have money with people who need money – the way finance and Wall Street actually operate can get very complicated, and involves lot of jargons. The movie Inside Job however, does not involve very many new terms, and explains the recent global financial crisis nicely (even though some of the opinions in the movie may seem biased).
1. When Lehman brothers was in trouble, Henry Paulson called the other banks’ CEOs on a meeting to find a solution to Lehman Brothers’s problem? Why did Henry Paulson think that a private sector solution, instead of government bailout, was needed?
2. (Up to about 43:00 of the movie) Why did the Lehman Brothers sell not work out? Why did Paulson want Lehman Brothers to file Bankruptcy before markets opened?
3. Why did the markets in Europe and the USA still panic after Leman Brother’s bankruptcy?
4. (From about 53:00) How does the real economy (industries/corporations) get affected by a financial sector panic? You can use the example of General Electric as shown in the movie.
5. (From about 42:40) Why couldn't the government let AIG fail? How was AIG entangled with the entire global financial market? Why would the other major banks go under if AIG failed?
6. Many people argue that the govt. should have bailed out the homeowners by directly giving monetary support to the homeowners, not to the big banks who had messed up with people's money. They argue that in that way homeowners would not have to go for foreclosures and home-price would not fall, and that would save the banks' balance tables too. Why do you think the system could/couldn't be saved that way?
3
Questions based on the movie Inside Job
Background: Although the basic function of financial markets is straightforward – to match people who have money with people who need money – the way finance and Wall Street actually operate can get very complicated, and involves lot of jargons. The movie Inside Job however, does not involve very many new terms, and explains the recent global financial crisis nicely (even though some of the opinions in the movie may seem biased).