Adam Rikkers, Introduction, Question #5

One of the more interesting passages that appealed to me was the one about the investment bank Lehman Brothers declaring bankruptcy. I knew that it had happened and I knew that it was bad, but I never understood or learned how it happened. The specific passage that was interesting to read was about how "Banks typically 'sell' most of their mortgage loans, meaning that they get a lump sum of cash now from some third-party investor who gets the stream of future mortgage payments in return"(xxiii). From that I could understand that "...it doesn't matter how bad a loan is as long as you can pass it on to someone else before the borrower defaults"(xxiii). The book also mentioned the term "hot potato", and I found that a really simple and good explanation for how the financial crisis in 2008 started. Altogether this particular passage interested me and helped me understand more about how the financial crisis started, and not just how bad it was.