Money Archives

Specialty Finance: What It Is, Who It’s For, and Why It’s Risky

What is specialty finance? What does it offer, and how is it risky? Did specialty finance loans contribute to the 2008 financial crisis? Specialty finance is the euphemistic name of financial industries that provide financial products and services to the least-creditworthy Americans, people who wouldn’t be able to get a loan from a traditional bank. Learn how the industry of specialty finance became lucrative and how its preying on uncreditworthy Americans contributed to the 2008 financial crisis.

What Is a Tranche in Finance? The Simple Definition

What is a tranche in finance? How did they change the mortgage-backed securities market and make subprime loans desirable to investors? A tranche is a slice or portion of a security sold to investors. Learn how tranches work in finance, what their role in mortgage-backed securities is, and how they revolutionized these securities so quickly and dramatically that they laid the groundwork for the 2008 financial crisis.

Steve Eisman’s “Big Short” (and the Morality of Investing)

Who is Steve Eisman, of The Big Short fame? What is his background in finance, and how did he profit from the 2008 financial crisis? Steve Eisman is an investor best known for having shorted the housing market and profiting from the 2007-2008 financial crisis. In the film The Big Short, Steve Carell’s character Mark Baum was based on Steve Eisman. We’ll cover Steve Eisman’s background, his brash personality, and how he shorted the housing market.

Morgan Stanley’s 2008 Crisis: How the Bank Lost $37 Billion

What caused Morgan Stanley’s 2008 crisis, in which the bank almost collapsed? Who paid for Morgan Stanley’s bailout? We’ll cover the events leading up to Morgan Stanley’s 2008 crisis and how its bailout cost American taxpayers bukkuibs.

AIG Bailout in 2008: The Fate of a Giant Too Big to Fail

How did the actions of AIG lead to the 2008 crisis that affected millions of Americans? Did AIG know the role it was playing in the catastrophe, or was it ignorant of the wider implications of its business practices? And who paid the price for AIG’s bailout? We’ll cover how AIG insurance company (American International Group) aided banks in the events that would lead to the 2008 financial crisis and the results of the 2008 AIG bailout.

Side Pocketing in Hedge Funds: What It Is (And How Investors Benefit)

What is “side pocketing” in relation to hedge funds? Why would a fund manager need or want to “side pocket” investors’ money? Is it legal? Side pocketing is when a hedge fund manager temporarily refuses to let investors withdraw their money. We’ll cover how side pocketing actually benefitted investors in hedge fund Scion Capital, profiled in the book and movie The Big Short.

How to Get to Yes: 6 Critical Skills to Succeed

Negotiating is a skill you use daily. How can you get others to give you what you want and need? Everyone wants to know how to get to yes. We’ll cover the key skills and strategies to figure out how to get to yes at work and at home, every day.

Can Money Buy Happiness? Up to a Point

Can money buy happiness? Some might say it depends on who you ask, but social scientists might say it depends on how much you have. Learn how money affects your levels of happiness, why more isn’t necessarily better, and why more might actually be worse.

Nike’s IPO: When Nike Finally Went Public

In 1980, Nike finally went public through their IPO, 18 years after Phil Knight got started in the shoe industry with Blue Ribbon Sports. Learn about the history of Nike’s IPO and their long refusal to go public.

Inverted-U Graph: More Can Be Worse

Is more of something good always better? The inverted-U graph says no, not always. An inverted-U graph is a curve that models the point at which something “good,” like money or effort, starts to make a situation worse. Learn why it’s useful in predicting the point at which you might have too much of a good thing.