Marchetti's APUSH: February 2016

Monday, February 29, 2016

February 29

Hello ladies and gentlemen,

Today in class we will be taking our Chapter 28 Quiz (I hope that you saw the hint from Friday's post!), then we will be talking about the Civil Rights movement and doing a reading activity. Don't forget that I won't see you again until Friday because of the SAT on Wednesday, as such make sure you watch the videos and answer the questions for Friday when we return together. Below you will find our agenda, homework, and resources for the day.

Agenda:

Chapter 28 Quiz
Discussion: The Civil Rights Era
Activity: Comparing MLK and Malcolm X

Homework:

Cold War Timelines due Tonight!
Watch videos and answer questions
AP Test Sign up on Friday!

Bring your Student ID Card and money to pay for the tests

Unit 8 Essay due March 11
Presidents Quiz due by April 1
Outside Reading Project due by March 28

That's all for today ladies and gentlemen. Good luck on the SAT! I will miss you these next few days.

Live long and prosper,

Mr. Marchetti

Video Questions (Come to class with your answers!):

For the First Video

Briefly describe each of the primary civil rights movements

African American Civil Rights
Chicano Movement
American Indian Movement
Women's Movement

What are 2-3 key events that stand out to you? Explain why you chose these items

For the Second Video

Explain the process of desegregating Mississippi's university system
What happened at Ole Miss when James Meredith attempted to register for courses at Ole Miss?
Explain the role of the Federal Government in assisting desegregation
What role did sports play in the healing process?
What is the legacy for white Mississippians? For black Mississippians?

Friday, February 26, 2016

February 26

Hello ladies and gentlemen,

Today in class we are taking our Chapter 27 Quiz and also working on our Cold War timelines. The timelines are due tonight so make sure you get your work done! Below you will find our agenda, homework, and resources for the day.

Agenda:

Chapter 27 Quiz
Activity: Timeline Work Time

Go to this website

Sing up for an account with the class code
Period 2 - 18303
Period 4 - 18304

Create a new timeline following these directions

Your timeline must include the following items
Banner Image
Cover Image
Title and Introduction
Heading (optional, may want to use headings to group like events)
For each event include:

1 Text box with

When it took place
What it was
Who was involved

1 image
1 video OR audio file
1 "Did You Know" synthesis fact that connects to something happening in the U.S. or world today.

Conclusion

Must include the Ten events below on your timeline

"Long Telegram" development of Containment
Marshall plan
Berlin Airlift
Korean War
1953 Iranian Coup d'etat
Cuban Missile Crisis
Vietnam War (1965-1970)
Vietnam War (1970-1975)
SALT I and SALT II Treaties
Strategic Defense Initiative

Homework:

Chapter 28 Quiz on Monday!

Short Answer Hint!

Review the Elections of 1964, 1968, and 1972

What can you learn about the country and politics from each election?

SAT on Wednesday next week!

Some changes to Unit 8 and Unit 9 Assignment sheets

Check them out!

Unit 8 Outside Essay due March 11
Presidents Quiz due by April 1
Outside Reading Project due by March 28

That's all for today ladies and gentlemen! Hope you have a wonderful weekend!

Live long and prosper,

Mr. Marchetti

2-26-2016 PPT

Wednesday, February 24, 2016

AP Sign Up Information

February 24

Hello ladies and gentlemen,

Today we have a lot to cover so buckle up! We will be discussing some general items before we get into the main activity today of creating a Cold War Timeline. We will also be having a general open discussion about the Cold War before we move into the timeline. Below you will find our agenda, homework, and resources for the day.

Agenda:

Review

DBQ Writing
The AP Test

Finish: The Atomic Cafe
APUSH Survey
Warm-Up #10
Discuss: Cold War

Go to this website
Sing up for an account with the class code

Period 2 - 18303
Period 4 - 18304

Create a new timeline following these directions
Your timeline must include the following items

Banner Image
Cover Image
Title and Introduction
Heading (optional, may want to use headings to group like events)
For each event include:

1 Text box with

When it took place
What it was
Who was involved

1 image
1 video OR audio file
1 "Did You Know" synthesis fact that connects to something happening in the U.S. or world today.

Conclusion

Must include the Ten events below on your timeline

"Long Telegram" development of Containment
Marshall plan
Berlin Airlift
Korean War
1953 Iranian Coup d'etat
Cuban Missile Crisis
Vietnam War (1965-1970)
Vietnam War (1970-1975)
SALT I and SALT II Treaties
Strategic Defense Initiative

Activity: Timeline

Homework:

Chapter 27 Quiz on Friday!
Presidents Quiz due by April 1
Outside Reading project due by March 28

That's all for today ladies and gentlemen! This Timeline is worth a lot so don't neglect it!

Live long and prosper,

Mr. Marchetti

2-24-2016 PPT

Monday, February 22, 2016

February 22

Hello ladies and gentlemen,

Today we are taking our Chapter 26 Quiz! Exciting! Hehe we are now on our last major leg before the AP Exam! Below you will find our agenda, homework, and resources for the day.

Agenda:

Warm-Up #9
Chapter 26 Quiz
Review:

DBQ Writing
The AP Test

Homework:

Chapter 27 Quiz on Friday!
Presidents Quiz due by April 1
Outside Reading Project due by March 28

That's all for today ladies and gentlemen!

Live long and prosper,

Mr. Marchetti

2-22-2016 PPT

APUSH Survey

Hello ladies and gentlemen,

Here is a survey we APUSH teachers would like you to take to provide some information to prospective future students who might take the course. Please be honest and truthful in your responses.

Thanks!

Live long and prosper,

Mr. Marchetti

You need to be logged in with your SJUSD account to take the survey

Saturday, February 20, 2016

Chapter 26 Quiz Tip

Hello ladies and gentlemen,

Just a little quiz tip for Chapter 26. Review the rise and spread of mass culture in the 1920s and compare to the rise and spread of mass culture in the 1950s. Mass culture can also be considered popular (pop) culture, anything to do with society, economics, and technology that large numbers of people engage in.

Hope this helps!

Live long and prosper,

Mr. Marchetti

Friday, February 12, 2016

February 12

Hello ladies and gentlemen,

Today in class we are taking our Chapter 25 Quiz and then we will be finishing the Atomic Cafe documentary. This is our last day together before the break so make sure you rest up and relax over the next week! below you will find our agenda, homework, and resources for the day.

Agenda:

Chapter 25 Quiz
Finish Atomic Cafe

Homework:

Enjoy your break!
Chapter 26 Quiz Monday Feb. 22
Presidents Quiz due by April 1
Outside Reading Project due by March 28

That's all for today ladies and gentlemen. Enjoy your break!

Live long and prosper,

Mr. Marchetti

2-12-2016 PPT

Wednesday, February 10, 2016

February 10

Hello ladies and gentlemen,

Today in class we will finish our illustrative design activity, introduce Unit 8, and begin watching Atomic Cafe. Atomic Cafe is one of my favorite documentaries and offers some insight into the early atomic age in America. Below you will find our agenda, homework, and resources for the day.

Agenda:

Finish Illustrative Design
Warm-Up #8
Introduce Unit 8
Start Atomic Cafe

25 bullet point notes and don't forget the discussion questions found on the PPT slide!

Homework:

Chapter 25 Quiz

Don't forget to study the first Red Scare (1919-1921) and/or bring those notes for the quiz on Friday!

Presidents Quiz due by April 1
Outside Reading Project due by March 28

That's all for today ladies and gentlemen! I hope that you all enjoy the documentary as much as I do!

Live long and prosper,

Mr. Marchetti

2-10-2016 PPT

The Atomic Cafe from koba on Vimeo.

Monday, February 8, 2016

February 8 - Writing Review Monday

Hello ladies and gentlemen,

Today in class we are doing a slightly different writing activity. This will be a linkage activity where I want you to practice connecting historical items together. Below you will find our agenda, homework, and resources for the day.

Agenda:

Writing/Content Review Activity #4

Define FOUR historical terms
Write a linkage paragraph
Share with partner
Share with class

Turn in Writing Activity #4 (end of period)

Homework:

Unit 7 Outside Essay due Tonight!

11:59 pm tonight

Chapter 25 Quiz Friday
Presidents Quiz due by April 1
Outside Reading Project due by March 28

That's all for today ladies and gentlemen! Remember that making historical connections is an important part of the AP Exam but also just an important part of studying history.

Live long and prosper,

Mr. Marchetti

2-8-2016 PPT

Friday, February 5, 2016

February 5

Hello ladies and gentlemen,

Today in class we have our Unit 7 DBQ Exam! This marks the end of Unit 7 so make sure you get on your Outside Essay and take a look at the Unit 8 Assignment Sheet. Below you will find our agenda, homework, and resources for the day.

Agenda:

Unit 7 DBQ Exam
Activity: Illustrative Design

Homework:

Unit 7 Outside Essay due Monday by 11:59pm
Work on Illustrative Design

Come to class on Wednesday next week with a concept ready to be finished and turned in during class.

Check out the Unit 8 Assignment Sheet
Chapter 25 Quiz Friday
Presidents Quiz due by April 1
Outside Reading project due by March 28

That's all for today ladies and gentlemen! Hope you guys have a good weekend!

Live long and prosper,

Mr. Marchetti

2-5-2016 PPT

Wednesday, February 3, 2016

February 3

Hello ladies and gentlemen,

Today in class we have a lot going on! We will be discussing World War II, taking our Chapter 24 Quiz, and Finishing our New Deal Project presentations. Time permitting we may also start an art activity for World War II. Don't forget our Unit 7 Test on Friday! Bring your Unit 7 Packets complete and ready to turn in then as well. Below you will find our agenda, homework, and resources for the day.

Agenda:

Quick Discuss: World War II
Chapter 24 Quiz
Gallery Walk: New Deal Reforms
Activity: Illustrative Design

Homework:

Unit 7 DBQ Exam on Friday!
Unit 7 Packet due on Friday!
Unit 7 Outside Essay due Monday
Presidents Quiz due by April 1
Outside Reading project due by March 28

That's all for today ladies and gentlemen! Make sure you review the DBQ prompts below to prepare yourselves for the Exam on Friday.

Live long and prosper,

Mr. Marchetti

2-3-2016 PPT

DBQ EXAM Prompts!

1 - Analyze the responses of Franklin D. Roosevelt’s administration to the problems of the Great Depression. How effective were these responses? How did they change the role of the federal government?

Use the documents and your knowledge of the period 1929-1941 to construct your essay.

2 - It was the strength of the opposition forces, both liberal and conservative, rather than the ineptitude and stubbornness of President Wilson that led to the Senate defeat of the Treaty of Versailles.

Using the documents and your knowledge of the period 1917-1921, assess the validity of this statement.

Monday, February 1, 2016

:)

February 1 - Writing Monday

Hello ladies and gentlemen,

Today we once again have a Writing Activity to practice our skills and review content. We will be practicing writing a two-chunk paragraph, but this time we will include some document analysis. Don't forget that we have our Unit 7 DBQ Exam on Friday! Below you will find our agenda, homework, and resources for the day.

Agenda:

Writing Activity #3

Write a 2-chunk paragraph
Share with partner
Discuss with class

Turn in Writing Activity #3 (Due at end of class)

Homework:

Chapter 24 Quiz on Wednesday
Unit 7 DBQ Exam on Friday
Unit 7 Outside Essay due Monday
Presidents Quiz due by April 1
Outside Reading project due by March 28

That's all for today ladies and gentlemen! Hope you have been paying attention during these writing exercises as I expect you to apply them on Friday!

Live long and prosper,

Mr. Marchetti

2-1-2016 PPT

Tutorial Schedule

Outside Reading Project (1st Semester)

This is required for ALL students and must be turned in at ANY time prior to December 6. Below you will find the directions and resources to complete this assignment. It is worth 100 points.

Step 1: Choose a Historical Book (Non-fiction) and read a minimum of 100 pages from the text. This book must be on a topic from United States history in the years 1607 to 1899. You should pick a book from the list provided (see below), but may read another book as long as you get it approved by me (the teacher) ahead of time!

Outside Reading Book List

Step 2: After you have read at least 100 pages of your text, complete the Outside Reading Worksheet (see below). Make sure that your project is typed and turned in on or before December 6. Late assignments will NOT be accepted!

Outside Reading Project Worksheet

Submissions go to Google Classroom classroom.google.com

If there are any questions please feel free to email me, or ask me in class. DO NOT forget about this assignment!

Fun Stuff

Hey ladies and gentlemen,

I thought I would start a little list of fun things I wanted to share with you. Needless to say these are fun US History things!

First here is a podcast that is currently in production, examining each of the U.S. presidents in order (starting with Washington). The creator will be doing one president a week up to the presidential election in November!

Presidential

The next is for those of you who are interested in what is going on with the Supreme Court. This podcast follows the work of the Supreme Court and examines in depth the issues faced by the Court today. It is very good and informative!

Amicus

FIVE STEPS TO UNDERSTANDING THE 2008 FINANCIAL CRISIS

I found this on a review for a documentary about the 2008 Financial Crisis and thought it was a great summary of what happened. So I decided to share! Read if you are interested :-)

FIVE STEPS TO UNDERSTANDING THE 2008 FINANCIAL CRISIS

1) The Home Mortgage
It all starts with the venerable home mortgage. This is the most important piece of the puzzle. Think about how the traditional home loan works. You go to buy a house. You apply for a home loan at the local bank. The bank checks your credit. If you seem credit worthy the bank lends you the bulk of the money to buy the house. However, to insure that the bank doesn't risk suffering a loss it does three things: 1) it asks for a down payment. 2) It requires you to insure the house (fire insurance and what not). 3) the bank places a lien on the property, thus making the property act as collateral for the loan.

The down payment insures that there is equity in the home. Equity simply means the house is worth more than the amount owed. This is critical. The bank always needs to be in a position where the property is worth more than what it can be sold for. Ideally, a down payment needs to be sized such that there is sufficient equity to withstand minor fluctuations in the housing market. Positive equity, combined with homeowners insurance has for decades insured that the bank won't suffer a loss on money that is being lent.

2) Securitization
A properly structured home mortgage is a very safe investment, and thus a popular one for banks. The popularity, and sheer number, of mortgages made them attractive to a financial process referred to as "securitization". With securitization, large quantities of mortgages are purchased from the local banks by a financial services company. The loans are grouped together and then re-packaged into a variety of securities (investments) that are then resold to willing buyers. Think of securitization as you would processed foods. An organic vegetable garden in your backyard is analogous to the previously described traditional home loan. A garden produces pure and simple food. A home mortgage from the local bank is pure and simple. But if instead of consuming those vegetables, what if they were instead sold to a food conglomerate, which extracts a portion of the crop, adds some preservatives and cans the vegetables in various configurations and sizes (corn, peas, mixed vegetables, etc.)? That's equivalent to financial securitization. Home loans are processed into a variety of investment vehicles and made available to wide range of consumers.

By the way, although the umbrella term "securitization" is used to describe the aforementioned process, the term "derivative" is often used with regards to activities such as repackaging mortgages. The resulting security (investment) is *derived* from the original home loans in this case (there are many types of derivatives employed in the finance and investment world).

3) Deregulation
Securitization, in and of itself is not a bad thing. Fresh vegetables can potentially be processed in a manner that retains much of their flavor and nutritional value. For example, organic barley is grown in Oxnard, California and processed into a product called 'Barley Green'. This brings one of the best concentrated super-green foods to consumers who otherwise would not have access to such nutrition. Likewise, mortgages can be repackaged into safe investment vehicles available to those who otherwise could not participate in the mortgage market. But keeping securitized investments safe requires rules (regulations). There are two specific kind of rules (lack of rules, actually) that directly relate to the financial crisis in 2008.

First, in 1999 a very important law controlling the behavior of the financial services sector was repealed. It was the Banking Act of 1933, colloquially known as "Glass-Steagall", named after the two senators who proposed the law. Glass-Steagall was a very simple, 37 page law designed to help prevent another depression. It basically said: The bank cannot make risky investments with depositor's money.

[Some people will recall that in the 1980s the Savings and Loan industry was deregulated in a similar manner. In short order this led to the failure of hundreds of S&Ls.]

The second rule that was repealed was in fact never engaged. Congress tried to regulate the completely unregulated derivatives market. Recall that derivatives are tradable securities derived from real things (home mortgages, other types of secured loans, crops, etc.). In 2000 a movement was underway to regulate the trading of derivatives. Some law makers and people in key government positions fought against such regulation (probably the same people behind the repeal of Glass-Steagall), and Congress failed to pass any legislation on the matter.

So, going into the 2000s, banks now had the right to use customer deposits to engage in most any type of investment they wished, and this included derivatives. In the next section we will see how derivatives went wild, and how the whole securitization of home mortgages went very wrong.

4) Tail wags dog
So far we are talking about [safe] home loans being purchased en mass and repackaged for sale as collateralized (safe) investment vehicles. We also know that the derivatives being created in this process are unregulated, and we know that banks can use customer deposits to purchase these derivatives and resell them to their customers, but we don't yet know what deregulation shenanigans are about to occur.

The specific name given to securitized home loan derivatives is "collateralized debt obligation" or CDO. Don't get intimidated here. A collateralized debt obligation is simply a collection of mortgages! A mortgage is an *obligation* to pay a *debt*, with the *collateral* for the debt being the house and the property it is built on. Collateralized... Debt... Obligation. When you buy a CDO you are buying a portion of one or more home owner's mortgage.

CDOs became EXTREMELY POPULAR! Why? Because they were considered safe investments that produced a reasonable rate of return. CDOs came in many sizes to fit an array of portfolios, and, they were plentiful.

When a derivate of the nature of a CDO is offered for sale to certain market segments, such as retirement funds, the security must be rated by a third party as to its relative safety. Enter the Big Three rating agencies. Just as there are the Big Three credit reporting agencies, there are the Big Three companies that independently evaluate and rate securitized investments (Inside Job tells us the names). These agencies put their reputation on the line every time they rate a security. Many mortgage based CDOs received a rating of AAA, the highest possible investment grade rating. The venerable AAA rating is equivalent to a US Government Treasury Bill, which is considered the safest place in the world to put your money (the Federal government has never directly defaulted on a T-Bill).

As the popularity of the CDO industry grew, income of the ratings agencies skyrocketed because the agencies charge a fee to rate each CDO (nice work if you can get it). The CDO was a windfall for the Big Three credit rating agencies. Thanks to the CDO, mortgage backed securities were suddenly available to a wide array of investors. Institutional investors snapped them up. Demand became so high that there weren't enough home loans to produce the CDOs investors so coveted.

And this is where the trouble begins. Demand exceeded supply. This is where greed raises its ugly head and the slippery slope toward financial meltdown really began. This is where the tail started wagging the dog because loan demand began getting generated on the back end (the financial sector), not on the front end (a family seeking to buy a house). The quickest solution to create more CDOs was two-fold; a) make more home loans, and b) include other types of loans in the securitization process. Oh my. Yes, this is where the sub-prime loan comes in. Lowering lending standards was the quickest way to grow the number of mortgages that could then be re-processed into CDOs. It was easy for the loan originators (the banks that granted the loans) to grant sub-prime loans because they were selling the loans to the financial services industry for a fee, thus taking themselves out of the risk loop.

But that was not enough. The investment banks that created CDOs went a step further and started to include other types of loans in the CDOs; car loans, school loans, commercial loans, etc.

Oh my. So the logical question is: What happened to the ratings on these Frankenstein-esk CDOs? Sub-prime loans, by their very nature, are not the highest quality loans and thus do not deserve the highest quality ratings. The answer is the ratings agencies continued to issue AAA ratings for these CDOs. This is corruption, plain and simple. The ratings agencies were making money hand over fist rating these securities. They knew that if they kept issuing AAA ratings the investment banks would keep submitting freshly minted CDOs for rating. It's plain old greed and corruption folks, nothing complicated here. Inside Job shows clips of the heads of the companies testifying before Congress. It's laughable.

5) What's worse than a Frankenstein CDO? Leverage and Credit Default Swaps
At this point in time a lie is in effect. Institutional investors such as state pension funds, county retirement plans, and thousands of other entities seeking a safe place to grow their money are buying AAA derivatives that are in fact far riskier than they appear. The cancer of greed begins to spread further however. Large lending institutions that started to crowd out the proverbial local bank appeared on the scene. The biggest was Countrywide, issuing (as reported in Inside Job) a reported 97 billion dollars in home loans. This new breed of lenders invented additional ways to grow its profits. It lowered lending standards even further. It waved the down payment, relaxed income requirements, and failed to verify the income entered on loan applications... thus creating the liar loan. To add insult to injury the lenders also increased their profits by placing well qualified buyers into sub-prime loans, even if the buyer qualified for a lower interest loan. Sub-prime loans have a higher rate of interest and thus the lender's profits were higher. Is this not essentially stealing?

Bear in mind that the only thing that kept this scheme going was ever rising home prices. As long as the economy maintained enough jobs, as long as interest rates stayed low, this process continued. One side effect of the boom in easy home loans was a boom in demand for those loans, which produced the greatest ramp up in real estate prices in memory. Thus we have the "housing bubble".

But wait. The slippery slope of greed did not stop there. The engine that supplies mortgages to feed the CDO process was fueled further when the lenders and the investment banks started to BORROW MONEY to in-turn lend it out for more home mortgages. And where did a portion of those borrowed funds come from? From depositors accounts. Made possible by the repeal of a law that had kept the financial markets intact for decades since the Great Depression. Borrowing money to fund the granting of additional mortgages was a highly significant event for another reason as well. When you borrow money to make an investment (in this case to lend money to home buyers) you add "leverage".

Leverage was the straw that broke the back of the financial system in 2008, so it's helpful to understand how it works. Financial leverage works like any other form of leverage. A physical lever that you press down, say, one inch, might lift an object on the other end by 1 foot. Conversely, if you let up on that lever by, say, 1/2" the object lowers 6". Leverage works going up as well as coming down. The effect is multiplied in either direction.

In finance, if you have one million dollars to finance mortgages, and then borrow an additional million, you double your income. That's 2:1 leverage. All you have to do is pay a small loan payment once a month to service the loan on that second million dollars. If the income from securitizing the extra million dollars is greater than the interest rate on the loan, you're ahead. Inside Job asserts that investment banks leveraged as high as 33:1. This meant MASSIVE profits in the billions of dollars, but it also meant that the real estate market -which provided the collateral for these loans, had to keep rising, or at least tread water. If property values were to drop, the equity of the loan could become less than the amount owed. This is bad. It could in turn generate a margin call from the entity that lent you the million dollars, requiring you to come up with additional funds to make up for the loss. Also, if for some reason home owners started defaulting on their mortgages -say because they lost their jobs, or because the interest rate on their adjustable loan rose to fast- then you might not be able to even make the minimum payment on the money you borrowed, let alone pay back the principal. You would end up defaulting. It's like dominoes.

Now be sure to multiply all that by 33. With such extreme leverage, even if the homeowners kept up their payments, if the value of the home decreased by say, 25% in a caving real estate market you would still be on the hook for the full amount borrowed, and the losses could add up to more then the entire net worth of your bank. Whoops.

We know of course that the real estate market did indeed contract. But believe it or not, there is one more piece to this puzzle to cover first. And believe it or not, it is arguably the most insidious component of what lead to the collapse. Just to recap, we have safe AAA rated CDOs that have been Frankensteinized by folding in sub-prime and other lower rated loans. Borrowed money, including consumer bank deposits, has been used to make more CDOs. Now enters the "credit default swap", or CDS. This is another easy to explain term. A CDS is essentially an insurance policy on the default of a CDO. Recall that private investors and institutions were buying CDOs - which are just mortgage backed securities- for safety and income. The CDOs paid periodic dividends, and the capitol was returned to the investor when the CDO expired. The investment banks started to get worried about all those CDOs! They were so levered up that the slightest drop in real estate prices, or a rise in interest rates, or a contraction of the economy leading to increased unemployment... would lead to defaults on home mortgages, which in turn would lead to the failure of the CDO they were backing. So the banks took out insurance against this eventuality from yet another institution. They bought credit default swaps from insurance provider AIG (American International Group). With a CDS, the holder of the CDO paid a recurring fee to AIG. AIG in turn promised to make good on the CDO if goes bad (they swapped the risk to another party). What's not to love?

CDS insurance doesn't seem like too bad an idea until you start to see (as explained in Inside Job) that the investment banks were recommending supposedly safe CDOs to their clients while at the same time the banks were effectively betting the CDOs would fail by taking out credit default swaps with AIG. It should be underscored here that a CDS paid out to the INVESTMENT BANK in the event of a default... NOT to the customers buying the CDOs, not to the owners of the deposit accounts, and certainly NOT to the homeowners. Moreover, you didn't even have to own a CDO to buy a CDS for it! Meaning, anyone at all could take out an insurance policy against a CDO. Or multiple CDOs. There was no limit because THERE WAS NO REGULATION. AIG issued multitudes of CDSs. When the real estate market collapsed, AIG was on the hook for the full value of every single CDS taken out on each CDO! Huge-o leverage. This is where the government stepped in to bail out AIG and other institutions on the verge of bankruptcy.

Epilog
So add it up. Lack of regulation gives the nod to the financial services community to behave as they wish. Demand for safe mortgage backed securities in investment portfolios gives rise to relaxed lending standards (spawning the sub-prime loan, the no down payment loan, and the liar loan). The temptation to create more CDOs prompts the inclusion of non-AAA rated loans to the security and bribing the Big Three ratings agencies to rate all CDOs as AAA. The use of leverage multiplies the losses if the economy stumbles or interest rates rise. And finally the creation of a vehicles to insure against the failure of CDOs transfers so much risk to a single entity that it can not possibly pay out when the claims start rolling in. Most troubling is that politicians and holder of Federal Cabinet positions fought hard to make the system so vulnerable. And many of those people are still in office today.

Now you know why these instruments are termed `financial weapons of mass destruction'. Inside Job goes on to explain how very little has been done to address the underlying problem...

Marchetti's APUSH

Class Resources

Pages

Monday, February 29, 2016

February 29

Friday, February 26, 2016

February 26

Wednesday, February 24, 2016

AP Sign Up Information

February 24

Monday, February 22, 2016

February 22

APUSH Survey

Saturday, February 20, 2016

Chapter 26 Quiz Tip

Friday, February 12, 2016

February 12

Wednesday, February 10, 2016

February 10

Monday, February 8, 2016

February 8 - Writing Review Monday

Friday, February 5, 2016

February 5

Wednesday, February 3, 2016

February 3

Monday, February 1, 2016

:)

February 1 - Writing Monday

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