TERM PAPER 2, Spring 2017 – Assignment and Submission Instructions.

Part 2 of the Term Paper is optional for some students.

Students who did not submit Part 1 of the paper will have their score on Part 2 counted as their overall paper score.
Students who received a C or D on Part 1 will receive the higher of their scores on Part 1 and Part 2 counted as their overall term paper score. If they fail to do Part 2, their scores from Part 1 and 2 will be averaged together.
Students who received an A or B on Part 1 will have the higher of their scores on Part 1 and Part 2 plus 10 points counted as their overall term paper score. The score on Part 2 must be at least a B to receive the 10 point bonus. If they do not turn in a paper their score on Part 1 will be counted as their overall paper score.
Readings for paper:

The Big Short by Michael Lewis.

In non-capitalist countries like Communist China (described in MacGregor’s The Party) there is one dominant way of getting rich. One must be a member of the ruling elite and use that membership to gain an unfair advantage in the marketplace. The unfair advantage can take many forms, exclusion of foreign competitors, e.g. keeping Google and Gmail out of the Chinese market, a monopoly on the ownership of a natural resource, destruction of competitors through bureaucratic action, preferential access to credit, or simply jailing competitors. In the few cases, where people in non-capitalist countries get rich without an unfair advantage, being a member of the ruling elite (or at least bribing one of them) is required to maintain and protect that wealth. Non-members have no chance of getting and staying wealthy.

In capitalist free market societies, ordinary people can get and stay rich on their own. One way is to invent a new product or a more efficient way of producing an existing one. An example of the latter, described in The Frackers, is technological innovations in oil production which lowered the cost of extracting oil in certain geologic rock formations. Once the technological innovation was discovered people used the free market to capture a portion of the innovation’s value making themselves rich. Drilling rights that were worth little without the new technology were bought and when the technologies benefits became widely known, the new owners profited greatly from producing oil cheaply using the new technology and from the capital appreciation of their drilling rights. Ordinary people with no political power or connections got rich.

A second way is by betting/investing on new products that will be highly demanded or a new technology that will lower the cost of producing existing products. Those who bought Microsoft stock or Google stock before they dominated the operating system and search engine markets profited greatly without actually inventing any new technology or creating a new product. Early investors got rich not by creating new products or discovering new technologies themselves, they got rich by anticipating which products and technologies would ultimately succeed and using financial markets to bet on them.

A related way of getting rich is described in The Big Short. The Big Short tells the story of how economically savvy investors predicted how demand for a good would change in the future and used financial markets to bet on their prediction.

A key feature of this story is how these investors used exotic financial instruments to create leverage, i.e. used exotic financial instruments so that for each $1 they bet they would win hundreds or thousands of dollars if they were proved correct.

The Big Short is the story of how a good understanding of economic theory was used by ordinary people to make themselves fabulously wealthy in a free market capitalist system.

Paper Assignment.

Download the Microsoft Word document from Canvas.

On the first page is a chart showing inflation adjusted housing prices from 1996 to 2012 and a supply and demand graph showing the U.S. housing market in 2000.

Part 1. Using the draw tools in Word, show what happened to the demand for housing by drawing the demand for housing in 2005, 2006, and 2009. Explain what caused demand to change over this period.

Part 2. If one wanted to speculate in the sub-prime mortgage bond market, explain the difference between buying a sub-prime mortgage, buying a sub-prime mortgage bond, and buying a sub-prime credit default swap (CDS) and how these financial instruments can be used to bet for profit.

Part 3. Explain the concept of leverage and how it applies to credit default swaps.

Part 4. Consider the players described in The Big Short. These include the large Wall Street firms and insurance companies AIG, Deustche Bank, Lehman Brothers, Merrill Lynch, Bear Stearns, Citibank, and Charlie Ledley of Cornwall Capital, Steve Eismann of FrontPoint Partners, Michael Burry, Greg Lippman, etc. Describe the nature of speculation in the sub-prime mortgage market and identify who was betting on what.

Part 5. In the end, U.S. taxpayers ended up paying almost a trillion dollars to bail out various Wall Street financial institutions. What role did government regulation of financial markets play in the events described in The Big Short. Consider the Do Nothing Policy discussed in lecture and apply it to the events described in The Big Short.

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers, and so ensure that our papers are 100 percent original. Our Team of professionals does not miss the mark; they ensure that step by step each paper is written uniquely. We never duplicate or work as we compare papers rest assured. We deliver our work a day before time to ensure that you don’t miss your deadlines. It is not only doing the work but delivering it at the right time. We capture the consequences of late remittances. .

Money-back guarantee

We value customer satisfaction here at and make sure that you get the best value for your Money. It happens that sometimes you can pay twice for your order or may want to cancel it, or you feel that it doesn’t meet your requirements; our money back guarantee will give you the opportunity to get back your money. We will also refund 100% of money paid double. In case your paper does not satisfy your requirements , we request that you notify us via writing within 2 days otherwise on the third day we will assume that you have been satisfied. Do all your correspondences through our email address

Read more

Zero-plagiarism guarantee

At, our professional writers know the consequence plagiarism does for our clients. We have updated software’s such as article checker and copyscape to check for originality of the custom papers before submission of the final paper to the you. Our guarantee to the customer is that we will write 100% original papers for them that are quality, timely and of low cost. We have experienced professional and competent PhD writers who will write quality custom papers for you..

Read more

Free-revision policy

. At, we are proud to provide top-quality Essay writing service to our esteemed customers. We are ready to take up that challenging academic assignment that is giving you sleepless nights and simplify it for you according to your desired requirements. We are willing to revise your paper if it does not meet your requirements. At, we do not compromise with quality; thus, we offer unlimited free revisions until the customer is satisfied with their custom paper. Our unlimited free revision services are provided under the following terms:.. .

Read more

Privacy policy knows that client’s information is an essential tool for our company. It means that whatever the client requests from our service is kept strictly confidential. It means that whoever writes for this company understands the terms and conditions hence you should not be worried because you will never see your work somewhere else...

Read more

Fair-cooperation guarantee

Rest assured that we will always be attentive to your needs and requirements. We belief in the phrase treat your neighbour as you would want them to treat you. We leave nothing to chance and always look forward to a good interaction with each other.. .

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages