The video while it is very informative has overlooked three germane points that exacerbated the financial meltdown.
- Collateralized Debt Obligations (CDO) where structurally flawed (ie: modeled incorrectly). See How Collateralized Debt Obligations Work.
- Financial firms were able convince regulators to reduce margin requirements thereby allowing greater leverage. This contributed to the downfall of down fall of several premier financial institutions such as Bear Sterns, Merrill Lynch, and Lehman Brothers. See the following CNBC article: What Went Wrong?What Went Wrong? – The Only Explanation You’ll Ever Need To Read
- Credit Default Swaps. Credit default swaps brought down AIG.