Why do you think banks made the nina loans

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Question: Listen to episode "The Giant Pool of Money" of This American Life and answer the following questions. Make sure to answer the overarching question of the different links in the chain (i.e., the middlemen) that linked Jim, the banker, and Richard, the marine, who are both introduced in the prologue.

1. What is a NINA loan?

• How typical have NINA loans been in the history of banking?

• Why do you think banks made these NINA loans?

2. What is the global pool of money?

• How much is in this pool in 2008 (the time of broadcasting)?

• How much was in this pool in 2000?

• What was Allan Greenspan's message to the global pool of money?

• Why were mortgage-backed securities so popular for the managers of the global pool of money?

• Describe how the loan application process progressively adopted lower standards.

3. What was wrong with the data that the loan officers used to assess the risk of the loans they were making?

4. Explain Jim's, the banker, innovation: the CDO.

5. Describe the day Silver State Mortgage closed.

6. Why doesn't Richard, the marine, just renegotiate his loan with the bank?

7. Why did the national housing crisis in the United States become and international credit crisis?

8. 500 word minimum

Reference no: EM132086080

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