The Doomsday Machine: The Institutional Mechanisms of the Subprime Crisis

This article provides an in-depth analysis of the institutional determinants of the subprime financial crisis, dubbed the "doomsday machine." The text deconstructs the "originate and sell" mechanism that led to the complete separation of risk from responsibility. The author focuses on the role of rating agencies such as Moody's and S&P, pointing to the structural conflict of interest resulting from the "issuer-pays" model. Complex derivative instruments, including CDOs and CDS, are analyzed, which, instead of stabilizing the market, became tools for the rapid transmission of systemic risk. The work sheds light on the process of "financial alchemy," where toxic assets gained legitimacy through mathematical models that, in practice, turned out to be merely social superstitions. This is a critical look at modern finance as a system based on asymmetric information and the illusion of rationality.