The 2008 Financial Crisis Explained
Civics 101
00:00
How Did the Bubble Burst?
Nick Gillespie: The housing bubble burst when people stopped paying their mortgages. He says investors and Wall Street firms got paid, but AIG couldn't pay out because it was on the other side of a credit-to-fault swap deal with big companies. Gillespie: People were left with something called an underwater mortgage; they could not sell or refinance to get better terms. "All of this, Nick, all of these little factors, the predatory lending, the quote, unquote, liars loans," he says.
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