This document is an extensive study, a post-mortem, on the causes and effects of extensive securitization of housing mortgage assets, resulting in a huge financial crisis, known as the sub-prime crisis of 2007-8, government’s response to that crisis and it’s taking various corrective measures, and analysis of these responses as to how and to what extent effective and sufficient. Many point to the bankruptcy of New Century Financial Corporation as the “official” beginning of the most recent subprime crisis. It would be difficult to trace this subprime crisis back to a particular date or to any single event. However, in hindsight, it is clear that the failure of subprime lenders was just a symptom of the underlying problems rather than the root cause of these problems. At this point, we have witnessed quite a number of other profoundly painful symptoms, including the failure of some of the country’s largest thrifts, the failure of a global insurance giant, the failure of a significant number of banks, the failure of several investment banks, and plummeting stock prices. The government has taken a number of unprecedented steps to combat these problems. The Treasury has injected approximately $250 billion of capital into financial institutions, and the Federal Deposit Insurance Corporation (FDIC) has expanded guarantees for bank liabilities.