What is Big Think?  

We are Big Idea Hunters…

We live in a time of information abundance, which far too many of us see as information overload. With the sum total of human knowledge, past and present, at our fingertips, we’re faced with a crisis of attention: which ideas should we engage with, and why? Big Think is an evolving roadmap to the best thinking on the planet — the ideas that can help you think flexibly and act decisively in a multivariate world.

A word about Big Ideas and Themes — The architecture of Big Think

Big ideas are lenses for envisioning the future. Every article and video on bigthink.com and on our learning platforms is based on an emerging “big idea” that is significant, widely relevant, and actionable. We’re sifting the noise for the questions and insights that have the power to change all of our lives, for decades to come. For example, reverse-engineering is a big idea in that the concept is increasingly useful across multiple disciplines, from education to nanotechnology.

Themes are the seven broad umbrellas under which we organize the hundreds of big ideas that populate Big Think. They include New World Order, Earth and Beyond, 21st Century Living, Going Mental, Extreme Biology, Power and Influence, and Inventing the Future.

Big Think Features:

12,000+ Expert Videos

1

Browse videos featuring experts across a wide range of disciplines, from personal health to business leadership to neuroscience.

Watch videos

World Renowned Bloggers

2

Big Think’s contributors offer expert analysis of the big ideas behind the news.

Go to blogs

Big Think Edge

3

Big Think’s Edge learning platform for career mentorship and professional development provides engaging and actionable courses delivered by the people who are shaping our future.

Find out more
Close
With rendition switcher

Transcript

Question: How does the credit crisis fit into the macroeconomic picture?

Thomas Cooley:  Yes, so the question is, I gather your question is how did this happen?  So there were three-- there were several ingredients.  Okay, one ingredient was, there was a bubble in housing prices.  People assumed that housing prices would just continue to go up and up and up and that they could take on unrealistic amounts of debt because the appreciation and the value of their houses would make it possible for them to deal with that amount of debt.  The other thing that happened was that there was a break down in lending practices by mortgage lenders.  So there was not sufficient oversight.  The fee structure for people issuing mortgages was such that their only incentives were to get mortgages out there, to grant them.  And then the other ingredient was sort of the rapid securitization of lending throughout the economy and throughout the world.  So what happened is, these mortgages got bundled and sliced into different pieces that supposedly represented different risk characteristics.  And then there's the vast machinery of the securitization industry, which rated a lot of these things as triple A or very, very safe securities, when they, in fact, they were not.  And so there was a whole un-virtuous circle of things that resulted from this.  That meant when housing prices began to fall, this whole business collapsed and that caused panic essentially in the credit markets because many people found themselves holding these exotic securities that were these bundled mortgages or pieces of them that they could not sell.

Recorded: 3/21/08

 

Re: How does the credit cri...

Newsletter: Share: