Class 1

Concept 2008 Housing Crisis from the perspective of raising finance through different
discussed instruments.
Slides None
Covered
Summary We discussed precisely how the 2008 financial crisis happened. We discussed the
several instruments that were devised by the banks using the fixed source of income
they recieved. We discussed how banks rose money through these instruments; how
they sold the MBS to the several people who wanted to raise money for funding
their own specific project. We discussed how, after purchasing these MBS, and
getting the money from them, the investors in MBS used those reciveable to factor
in more money from the banks (take more debt). We discused how Banks in their
attempts to gain more money, started providing loans without checking the credit
scores of the person and how they started implemented several schemes to attract
more consumers and / or provide more loans to exisitng consumers. We discussed
how consumers’ decision to restructure their debt started the entire collapse, because
there were too many houses to sell but too few buyers. We discussed how it lead to
the economic collapse; how all the companies that have started functioning during
that era and how all the companies that invested in these instruments went bankrupt
because of this type of a financing instrument.

Class 2,3, & 1st Part of Class 8

Concept 1. Three factors that are considered before a loan is given.
discussed 2. Deciding on how to raise money for a project.
Slides Lecture 4 - Slides 1-9, Lecture 4.1, Slides 1-6 & Lecture 4.3, Slides 1-5.
Covered
Class 2,3, & 1st Part of Class 8
Summary We discussed, in length, the factors that are considered by Lenders before loans for
given to companies - the size of the company, the cost on capital of the lender & the
collateral. We dicussed each of the element, down to the detail and then started
discussing the several financial (debt) insttuments involved in raising finances.

We also discussed (in the beginning of class 8 - debt securities) on what is the best
way to raise finance - through debt securities / through a lon. (I have added it, as it
makes more sense).