Based on all the information you could search and obtain, please show your personal understandings for the following questions regarding the 2008 financial crisis:

(1) What were the problems in our economy during the pre-crisis period, which finally led the entire world into this unprecedented crisis? Could you explain why those problems had such a severe impact to our economy?

(2) Could you please show at least two financial tools that were heavily used by Wall Street before 2008 but finally magnified our losses during the crisis? (For example, CDOs, CDS, and etc.) Please illustrate the basic idea of these tools (how did they work and being traded, what are the entities get involved in these tools, and etc.) and also why these tools lead the market into a severe collapse.

(3) Based on your own understanding, why the initial collapse of US markets finally generates a contagious effect to other countries, that other countries also suffer a lot and experienced severe local market collapses (For example, the post-2008 European sovereign debt crisis). (4) What are the measures you think would be useful for us (as individuals, firms, local governments, and global organizations respectively) to deal with the financial crisis, and help us forecast the crisis and reduce the cost of it. And why?