SOCIOL 120 Lecture Notes - Lecture 9: Financialization, Liquidity Crisis, Government Debt
Document Summary
6/20: sassen argues millions of profits are built on the back of modest people. Speculation makes derivatives so attractive as nobody knows where it is headed so people wanting to bet is increased. Sell mbs and cds and next person bet it increase in value so they sell it for more to next guy. Bank give people very high risk sub-prime mortgage (people who could not afford a house) just to create more derivatives (did not care about defaults) Why did minorities take these sub-prime mortgages. Due to racism many couldn"t not accumulate wealth or own a home and they were presented with a false oppty to own one. Civil rights movement that made minorities able to earn better wages and were better off at a bad time to enter the housing market. Pension funds put people"s" life savings at risk. So many people defaulted on mortgages that house prices went under water from 2002 onward.
