Toxic Assets

[quentinborys]

I wonder why I keep coming back to your page, such a nice channel!

[Leon112006]

even i can understand this, but the question on my mind right now is will the yen get stonger or weaker?

[zhalli1]

paddy you say ppl didnt practise due diligence and didnt know what they where buyng but wasnt a fraud committed by the banks they withheld information from the ppl and sold shitty loans

[bentham83]

Hes english not irish

[Buffettbuyingdotcom]

LEAVE IT TO AN IRISHMAN TO END ALL OF HIS THOUGHTS WITH...

"BADLY IN NEED OF A DRINK" LOL !

Very good set of modules ol, man !!

[paragshah2112]

@Buffettbuyingdotcom

no doubt! earlier today i had done a search on "quantitative easing" and of course caught a few hits. so i opened a few them at the same time across browser tabs (as is my habit) and his was one of them.

midway through viewing it, i didnt bother with the other vids, i just closed those tabs outright and continued to watch him and when i was done well ... i 've basically just been on his channel the whole day!

paddy makes the best vids. they're fun!

[ofontela]

Nothing left for the government to do but go to war..Again...

[maxthemagition]

If I buy something which is stated as 100% genuine (Wine for example) and I find that there is rubbish in there, then I could complain to the sellar.

In the case of all that junk that came from the good ole USA, wrapped up and triple A rating and 100% ..then if one finds they are toxic, surely this is fraud on a massive scale...

Imagine if it was the other way round and we sold the good ole USA toxic assets...We would find ourselves sued to the nth degree and somewhat more...

[edsaint03]

Woulda, coulda , shoulda! No shit it would be better for the government to better enforce the laws, no fucking shit... but we need to be pragmatic, stop depending on the government and depend on ourselves, self reliance, stop crying about it, hindsight is 20/20. We need to be pragmatic, whining is making the problem worse because finance today is not backed by anything tangible its backed by confidence. So complaining cause the government didnt protect you is counter-productive, suck it.

[shakaama]

here's the rub, by bailing out everyone, we are now making the economy worse. if the government had strictly enforced the bankruptcy laws the U.S. economy would have bounced bank by the end of next year, and unemployment wouldn't be 20% in some states.

with bankruptcy, you would have had better, brighter people come in and buy the assets, throw away the toxic crap and keep the pearls, including good employees.

[avster95]

govt buys toxic assets... so does that mean govt = toxic? :) just a thought hahahaha

[camyoung30]

Hey avster95, you buy a banana from a grocery store....you=banana? really? maybe you=a monkey, or just a moron.

[theebob2008]

@camyoung30 not to get into an argument but that might be true. When people eat junk food what happens usually? They start not looking so good compared to when they were eating healthier foods. This could be the same with the government. The government is eating up toxic assets. These are the assets that no one wants because it is not a sound financial investment. Since these are assets that are not good for individual investors it probably is not good for a government either.

[dilbertgeg]

@theebob2008 Yeah, our trusted public servants are telling these bankers (but not homeowners) "give us your junk debts and your busted lottery tickets, we'll put it on the public balance sheet, or stuff it into the Fed and keep it in our new off-the-books Maiden Lane fund which we just capitalized. We can pretend the losses do not exist and we actually got full "face" value when we paid you full price."

Who won? Them.

Who lost? Us.

Our pub servants ARE other bankers, friends of sellers.

[jainamshah007]

@avster95 nice thought

[robrown1]

Raise capital and negotiate secondary trading of equity and debt at UnifiedMarkets.

[salahuddin786]

Goodness. Toxic is worth ZERO. CDO are inclined to lose value by 90% due to the Depression.CDS the good stuffare likely to lose value by 70%.

The End Game is here.

RUN

[ranchy888]

Great video, man! Thanks a lot !

[GordonWalton]

He makes it sound like derivatives actually have real-world backing, rather than being a bet on the performance of a real-world asset.

Did you catch at 6:28 where he says "we got rid of the toxic assets, they are worth absolutely nothing, try and sell them to the government!" Sounds like the definition of fraud to me.

Jail the bankers now for their crimes and do the same to their co-conspirators the politicians.

[Rizky06]

Excellent Video....If all of the Assets become "Toxic" Can we put all of the Zombie banks in Bankruptcy and let them open up Salad Bars instead because there will be an unlimited supply of Vinegar!

[hajable9]

For us common people, don't use their words "toxic assets" and "sub-prime." In place of toxic assets, use words that reflect what happened. toxic assets translates to fraudulent contracts(FC), greed contracts(GC), the ultimate ponzi scheme(UPC), etc. For sub-prime loans, called it Prime Plus Loans(PPL). Some of you will come up with much better names than me. Make those names available. No what matter let us persist in avoiding their word coining words, terms, and phrases.

[m7er4c9x]

Very Well Done. A Real Service in terms of clear explanation.

[rtybeams]

No! He's a hot genius!

[davidivanhawks]

This guy is a fraud, just like all the rest. He has no common sence. There is no such thing as a "toxic asset". I have filled out many financial statements, and never saw a column for toxic assets. If it's not an asset, it's a liability. They use this term to decieve people, because they know no one wants to buy a liability. Be honest, call a spade a spade.

[SimonGriffindor]

No, afraid not. Toxic assets and liabilities are two very different things

[lidarman2]

LOL..."never saw a column for a toxic asset."

Classic. You go on with your "basic" accounting thinking.

[Knucc]

Not every slang term or buzzword has a spot on the balance sheet buddy. And your saying MBSs, CDOs, and CDSs are not assets? Dude wise up.

[cmart02BR]

David,

You are absolutely right!! Toxic Asset is simply a liability (not in the true accounting sense, but it is). And this liability cannot be quantified simply because no one know the size of such blackholes represented by TAs. And now Geithner comes up with this cool new name "Legacy Assets"... This is a all horseshit!

[idurandiaz]

.. FYI "davidivanhawks", a liability for a company (like a loan) or for a person (like a mortgage), represents an asset for the bank that's lending the money, and it appears as such (an asset) in the bank's financial statements. Therefore, the guy is the video is using the term asset correctly since he's talking about banks and not companies or people

[leebushwhack]

More likely, Mr. Lewis bought ten bottles held for delivery at a future date by the winery. Guess what? That case was sold ten times: I ask you, who owns that wine? And where did all the money go? Whose kidding whom?

[politicalair]

Of course bring something like this up to libertarians and the Ron Paul zealots think it's "price fixing" to give the market time for good assets to be paid off.

Deflation *absolutely* has to be stopped. Helicopter Ben, start dropping those dollars.

[wetalmorker]

Please explain how devaluation of the currency, and further burdening of the taxpayers, who are already broke, to put liquidity into a system that no one can/will borrow from, is a solution. Ron Paul and his "zealots" have been warning of this day for many years. Why blame the messenger?

[politicalair]

You're changing the subject. The point is proven by this video many so-called toxic assets may not be toxic in the future, or are only toxic temporarily.

As long as the Federal Reserve can control how quickly it can monetize bonds, there is no inflation no matter how knee deep we are in t-bills or debt to China.

[wetalmorker]

I wasn't speaking to the vid, but to your comment "Helicopter Ben, start dropping those dollars". If, by monetize, you mean as long as swf's are willing to bet on dollar denominated bonds, inflation is checked, I agree. They were willing to do that as long as they were awash in dollars, but that day has come and gone IMHO. So after a temporary bout of deflation due to rising inventories of tangible goods, the tables WILL turn. Ben doesn't have buyers lined up, inflation is all but certain.

[iftyshifty]

Paddy - please please keep these videos coming mate.

[edo1985]

we need people like you who can explain the current economy crisis with human language! thank you very much for the presentation!

[Tamarindu]

Thanks for the explanation! Great work, keep it up!

[saustink]

Thks I great videos.

[deletemepleez]

the way theyll save this is print more bills

[rollsthepaul]

The concept of money is perverted. The only requirement for receiving should be, need.

[clrncd]

Cheers!

[elpresidio]

Paddy Hirsch, you are the best! Informative, straightforward, clear, concise and very entertaining. A lot of this stuff discussed on CNBC goes over my head but you simplify these abstract concepts for regular people like me with simple real life analogies we all can relate to and grasping the logic behind it all becomes painless. Keep up the great videos. I am a regular subscriber and a big fan of your YouTube channel.

[scutterbear]

5 Stars!!

[coos678]

Very helpful. thank you

[gumichi1]

Great explanation. Keep it up. Regards.

[mnoel228]

great video, one of the best.