Housing prices soared

The financial system was awash in high-risk financial products. As everyone

could afford to buy a house because mortgages are granted regardless of the
risk, housing prices soared, following a basic economic principle, if demand
increases on a given well, the same prices rise.

Subprime loans increased from $ 30 million a year to over 600 billion

dollars a year in 10 years
Countrywide Financial Corp issued 97 billion dollars in loans

Mortgages by 99% of the property value as a general tonic regardless of which

at any time could change the situation of those who requested and therefore
"flee" of it, and which, moreover, despite this high default risk, 2/3 were rated
by the rating agencies at the level of the safest government securities.
CDS (Credit Default Swaps)
is a financial product consisting of a financial hedge risk, included within the
category of credit derivatives, which is implemented through a swap
agreement (swap) on a given credit instrument (usually a bond or a loan ) in
which the buyer of the swap makes a series of periodic payments (called
spread) to the seller and, in exchange, he is paid a sum of money if the title
that serves as the contract underlying asset is his unpaid maturity or the issuer
incurred in default.
American International Group (AIG) 85,000 million.