This is a really well done and easy to understand explanation of the credit crisis in the U.S. Now if only someone would give us a really well done and easy to understand explanation of how to climb out of said crisis...
Blocked here at work, but from what i read it all started with these huge companies like AIG and Merril Lynch. Bascailly the problem had to do with what they call "credit swaps" and those are basically unsecured, non government regulated insurance policies on loans that these big companies hand out like rain.
It goes something like this ....
Webster Bank loans you 400k for your house. AIG has a credit swap with Webster Bank stating that if John Smith defaults on his loan AIG will insure Webster for it, only, these credit swaps are not regualted so AIG does not have to physically have the money in reserve to cover the policy.
So when everyone started to default on their loans, all these big companies did not have the money to repay the banks or whomever so the banks were loosing money as well.
This is more scary then it seems,
Read this article
estimated 45 trillion dollars out there in credit swaps in 2007
Like i said before, this video is the credit crisis 101 version of what happened.
it actually goes a lot deeper than that. there were more parties involved. it goes as deep as the credit rating agencies manipulating the rating for the secured bonds, etc.
credit swaps aren't the issue. it helped contribute to it though. look at every bust in history. it all revolves around greed. unregulated greed.
crash of '29. uneducated investors able to make massive moves.
'87-greed of program trading and market arbitrage
tech bubble-stocks overevaluated and push push push
most recent-the housing crash=greed of everyone from home buyers to investors.
fuckit! i would have felt sorry for them too, but the way i see it, each and every person decides the outcome of their life.
if they needed to do something else, they would. look at the last time this shit happened, all kinds of new upstarts came about, and changed the way business is handled. this is the kinda shit i wanna see, not mother fucks with their thumbs up their asses goin, "uurrr duurr money gone" "please elp me..."
As basic as that vid may be, it helped me to better understand this crisis (I didn't really understand it before). I'm sure there's a lot more to it but this shows the process that actually fucked everything up. And I know there are a lot of people who don't know really what is going on with the whole scenario, I think this is a good way to present it so that really anyone can get it.
Cool stuff! (Except for that it's actually happening )
I didn't watch the whole vid. People should really check out a report msnbc did on the credit failure as well. I think it was part of their american greed series. It actually wasn't to far out in the left either and they explained in more detail exactly what this vid had to offer and more into what exactly caused everything.
What smart ass decided that people could get loans with out providing the most essential financial information or even with out SS numbers!!!!11? (Rhetorical)
As far as I'm concerned that is the one cause. Everything else just followed or added.