Khan Academy Static

In the fall of 2008, it became clear that a cascade of bank failures was happening because of shoddy loans and exotic securities (both which fueled a now popping housing bubble). In an attempt to avoid a depression, the Treasury Secretary (Hank Paulson) wanted to pour $1 Trillion into the same banks that had created the mess. This tutorial walks us through the beginnings of the mess and possible solutions. Historical note: it was created as the crisis was unfolding.

12823_Bailout_3_Book_value_vs_market_value.html

12834_Bailout_14_Possible_solution.html

12821_Bailout_1_Liquidity_vs_solvency.html

12827_Bailout_7_Bank_goes_into_bankruptcy.html

12830_Bailout_10_Moral_hazard.html

12822_Bailout_2_Book_value.html

12824_Bailout_4_Mark_to_model_vs_mark_to_market.html

12825_Bailout_5_Paying_off_the_debt.html

12831_Bailout_11_Why_these_CDOs_could_be_worth_nothing.html

12829_Bailout_9_Paulson_s_plan.html

12832_Bailout_12_Lone_Star_transaction.html

12833_Bailout_13_Does_the_bailout_have_a_chance_of_working_.html

12820_CNN_Understanding_the_crisis.html

12835_Bailout_15_More_on_the_solution.html

12826_Bailout_6_Getting_an_equity_infusion.html

12828_Bailout_8_Systemic_risk.html