
As this new era of easy money and massive leverage emerged, the thought that risk is limited and easily manageable permeated investors’ mindsets. Hedge fund managers, mortgage bankers, and Wall Street leaders were earning unprecedented amounts of money.

As you recall in part one we discussed huge supplies of investment dollars that caused the mortgage crisis as described in chapter two. This chapter will cover leveraged buyouts (LBO) and Structured Investment Vehicles (

So, how does this crisis end?