@evilclown99 I expect if you have a bunch of CDOs on your book and no one will buy them unless you are paying 30% you'd be quite fked as an investment bank.
disinfo piece. The MBS where never actually filled with anything. They are now being filled retroactively with non-performing mortages. That's why you have all the false paperwork with no on knowing who one's what. You can't own a "piece" of a promissory note unless it has multiple payees on it and still consider the note secured.
Silly little lairs. I like glieseman too but he's been duped or is a shill.
Poorly done. Fails to describe how purchasers get paid or dont get paid when mortgagors fail to pay. Misleads saying that performance is based on "faith.". Typical BS.
Its designed in this way by the elite for the elite. Actually its very simple as is law but the make a lot of mumbo jumbo to make it look complicated. Same shit goes for a lot of things like whitepapers in IT.
You know whats really fucked up? The same people who gained from writing people bad loans knowing they couldn't pay made money before the bailout made money during bailout and they're still making money doing the same fucking thing.
All the while the American workers wages have decreased for 30 years and the banks are profiting from it.
PRIME RATE has ALWAYS referred to the INTEREST rate a bank charges its most credit worthy customers. SUB-PRIME would be a rate below that...The term SUB-PRIME has NEVER been used to describe the CREDIT RATING of a borrower. "SUB-PRIME BORROWER" was coined to hide the FRAUDULENT MORTGAGES the banks sold. A securitized mortgage is a FRAUD.
This Steve Leisman douchebag was arguing against Peter Schiff passionately on a show back in 2004 when Pete was trying to explain the coming housing debacle 3-4 yrs ahead of time. It's easy to try to explain things after they happened, Isn't it Steve?
BANK OF AMERICA IS THE MOST CORRUPT BANK IN THE COUNTRY!. Bank of America harassed me, ruined my credit, charged me over $800 in fees over a 10 day period, tried to humiliate me, and never stopped calling my house- all because of $50 overdraft!!
In one day I was charged over $250 in overdraft fees because of a company that took advantage of my bank account- BofA charges more fees than any bank in the World!
can we sue the banks who mis interprated and misled the investors into believing that the AAA or BBB ratings were equivalent to convectional corporate/company ratings.
No...the fundamentals were bad for the home owners. One just had to check the 2007-2008 unemployment numbers. If I was CNBC I'd fire them not for doing a sub par Japanese high school presentation on SIVs/MBSs and derivatives but for the retarded conclusion on the matter
So basically, they placed bets on people defaulting on their mortgages.
Would it be too much of a stretch to suggest that some or most of these defaults were manipulated so that the people who placed these bets could make money?
After all, the people who took out these mortgages would start out with a low interest rate, and then all of a sudden it would skyrocket to the point where the y could no longer afford to pay.
Cool, now people don't have to pay their mortgages, because, when they are sold, the securities investors are not parties to the mortgage contract, so they have no standing in a court of law. contract.
this is so much helpful for my upcoming final exam. thankssssss ^^ though there're parts I can't understand :)) Oh my English hichic anyway, many thanks. more understandable than lots of other videos I've watched on Youtube
what we need to understand is they are trying to make the whole world their sweat shop, we will soon be going around the monopoly board with no properties and any money we get from chance or community chest will go right to them.
nothing like debt economy the more you spend the further in debt you go. That's what federal reserve notes are debt.
And mortgages are using debt to create more debt, What a scam. Every time there's a recession we buy more debt with debt and go deeper and longer into debt. wow
what no one talks about is how many bets were made on these mortgages that it would fail, Aig, country wide, fannie mae etc are still paying and will continue to pay these bets and most of them are not even recorded , they are all side bets and the hedge funds have been raking it in- no transparency -fuck private equity they created this crap and they knew the only one who could pay is the taxpayer - no wonder those fuckers are waiting on the sidelines having cashed in - free market my ass
thay must be prohibited. if you controll the market, i mean if you own the market you can always know who will win and so make a lot of money (take the money from the non-experienced)
He forgot to mention the total derivatives in question within the US.. some say 600 trillion, some say 1.5 QUADRILLION... thats 30 times the US GDP. lol
Anybody see a problem with JP Morgan's Derivatives or is it me? Something is up over at JP Morgan. Im like freaking out. When we come out of this mess, I dont think JP Morgan will be able to compete with Wells Fargo and Bank Of America.
Wells Fargo and Bank of America have continuously beat JP Morgan until recently. What gives?
The triple A rating has nothing to do with the credit worthiness of the loans. It has everything to do with who is willing to lose their money first. Essentially, the BBB- get the highest rate of return, but they will be the first to lose their money if there is any decline in the security. The next in line to lose their money are the BBB folks, followed by the A, and the AA. All these folks have to lose money first before the AAA folks are exposed. That's what makes AAA "safer."
great explanation, however the key element missing was the fact that all of the lending started with the Federal Reserve, the top lender. Also missed was Clinton signing into legislation the law which enabled 2nd level lending institutions (i.e. Lehman Brothers) to begin investing in the same Securities they created, thus blowing the Derivative Market bubble to astronomical levels. Otherwise great stuff.
@greenback001 The law Clinton sign was The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999 please tell me what party the sponsors of this law were? Gramm–Leach–Bliley. And how many democratic Senator's voted for it?
Do all of you guys understand this explanation in this video? For me it's like Chinese explained in Chinese. The use of that marker didn't help me much either. Is there a better video somewhere?
His final explanation of why they blew up is false. It was not a lack of "faith" but the reality that too many people with mortgages in these derivative packages could not afford their mortgages that they should never have been able to qualify for in the first place. It is all part of the pan to create hyperinflation to get out of debt while wiping out the middle class. 2 more words - BUY GOLD!!!
Former fed chairman Alan Greenspan has been a defender of derivatives since 1999 or before . Did you know that the same guy pushed subprime loans has also pushed derivatives
other regulatory agencies and Congress have taken a totally hands-off approach towards derivatives.
How Big a Problem?
How big is the derivatives market? Worldwide, it is $596 TRILLION dollars *. The derivatives market dwarfs the real market for goods and services, and acts likes an unregulated black market.
Search> Not Enough Money in the World: The Real Monster in the Meltdown Closet
This is the ultra-dangerous downward vortex in which the system is locked. It is why share prices are plummeting. As recession deepens, there will be defaults on securitised bonds and the potential collapse of more banks outside the G7 ring-fence. Nobody knows what proportion of the $55 trillion of credit default contracts written will be honoured and who might bear losses running into trillions of dollars.
2 reasons for sub-prime lending boom.First,congress made laws prohibiting redlining.Second,massive amounts of cash flowing in from china fueling the loans.
There should have been a law against sub prime loans. It's clear the persons giving out the loans knew it was not going to be paid back. They were just out to sell the future bad loans for money. Why are they still walking the street and not locked up?
The main reason for subprime loans failure was the extreem selfishness of charging higher rates for loans given to poor people as a compensation for the bank for bearing higher risk ...but actually the higher rates was a main reason for increasing the default rates extreemly and the increased risk premuim margin was not enought as a compensation! thats happen in every counrty ... business had no ethics in this world !
redviper ,the purpose of subprime ninja was to create the delusions of granderr for those that would believe
a lie,it is the last days afterall,hurt neither the oil nor the wine, a bushell of wheat for a penny and all that stuff that made the secular world scoff as it fell in love with its own smell.
We're in for nasty weather alright, and the grey-suited bastards will do everything to make sure we pay and not them. It will blow up in their faces one day though.
The big surprise in the foreclosure process is when the IRS sends you a tax bill on the unpaid balance of the home loan. It's what's known as "forgiven debt". And it's considered to be taxable "income".
Do purchasers of sub prime AAA,S Have any right to revenues from the sale of properties that "mortgagees" walked away from , or, are their rights confined to a share of debt INTEREST repayments should there be any
SIMPLY ,do purchacers of the AAA,S OWN either 1.THE GOOSE ,OR 2.THE first right to the GOLDEN EGGS IT ONCE LAID or 3.both
Capitalism is an ideal ,in practice we have crapitallism as far as the bankers [to use a euphemism]are concerned
Banking should have its own separate quAAArAAAntine clAAAssificAAAtion within stock markets, such as "connoddities"or"ponzis" till the FED recrapitallises them after they part with their AAA'S
Not capitalism. Capitalism is good and is part of human nature. It is socialism by the FED and Wallstreet if one truly understands how the market is being manipulated by these people. US today does not have a free market economy. It is racing toward socialism and becoming a fascist state.
You "pure capitalist" free-market types are always blaming all of our economic problems on any and all restraint of the power of capital. De-regulation is partly responsible for the current crisis, but if there's any regulation remaining, even the slightest regulation, then in your mind that has to be cause! Your definition of Socialism is also toally absurd. The FED is adored by bankers and venture capitalists the world over. Are they socialists?
You want "pure capitalism" go to Indonesia (85%poverty rate) or this country in 19th century when people worked 15 hours a day 6 days a week for $0.8 an hour. How about the depression that started in 1837? Before the evil Federal Reserve system was introduced. It was deregulation followed by unchecked speculation and greed that caused that crisis.And as far as capitalism being part of human nature, so is sex, but if it's not regulated by mutual consent, it becomes rape.
Or, you make a stupid mistake and a lot of other peolple pay for it while you retire to the Hamptons with your Porsche, your 25 year-old mistress and lots of cocaine. That's the reality of capitalism.
Look, my point is you won't be seeing anybody who was on the board at Lehman Brothers at the unemployment office trying to get benefits. You will however see a good number of their employees there. The afforementioned board members will probably be in the Hamptons golfing. Now do you see?:0
Maybe that's because the board members were already rich in the first place. But if they were holding the shares of the company, I'm pretty sure they stand to lose money as well.
Dude, I hate rich people as much as you do. But I have no sympathies for the normal employees of Lehman Brothers either. They derive their income from the same greedy practice of their company. You live by the sword you die by the sword.
I think you're confusing the term "capitalism" with many other societal and political systems and problems. Unfettered speculation in land is due to gov't policy of granting title to unused land to speculators instead of homesteaders. Industrial revolution factory worker conditions due also to people not having access to capital in land. You're absolutely right about the evil Fed system. But capitalism refers to free trade only. It does not assume unjust political and social conditions.
"Free trade" without any kind of legal or regulatory boundaries, will always breed rampant speculation and corruption. The market can easily be manipulated, cornered and coerced (a term libertarians love to use) into going in whatever direction the money people wnat it to. The Federal Reserve System is just one way their doing that. Take the word Federal out and youll still have the same thing: a group of privately owned banks ripping everyone off. capitalism is corrupt, government or no.
That's hardly a meaningful reply. If you define any system as being "without any kind of legal or regulatory boundaries...", then of course it will lead to bad things! How can you conflate force and fraud with a person's right to produce and trade ethically? You're just defining free trade as criminal and lawless, which is irrational.
Why do you think fractional reserve banking
would exist in a free market? Who would be stupid enough to accept their phony currency?
Capitalism is not corrupt. People are. Capitalism is the best way we have of managing our innate deficiencies. For close to a century attempts have been made at putting alternative systems into practice. All failed dismally. There will always be some degree of hierarchy in a society. Capitalism at least allows people some scope to improve their lot, instead of them being dooming to whatever social/economic role the politburo assigns them to.
Don't insult my intelegence by telling me that the only alternative to neo-liberal capitalism is Stalinism. The fact that there has always been a "degree of hierarchy in society" is no excuse for the widespread inequality and exploitation which exists in all 'free market' systems. Even a little socialism, such as that seen in Europe, goes a long way in improving the quality of life for the masses and even helps the market in many ways.
Oh yes 30% youth unemployment in the slums of Paris, nice work socialism. Miserable economic stagnation has marked Europe for more than half a century. Their present successes are attributable to the creation of a single, free market under the EU.
The only alternative to neo-liberal capitalism is authoritarian central planning. Yes, this comes in vastly varying degrees, but it is the only way of allocating resources without a market. I suppose you fancy yourself capable of the top job?
So Western Europe is a monsterous hell for the people unfortunate enough to live there? I suppose neo-liberal Indonesia is a paradise then? I'll take Paris over Jakarta any day, myself. What with the latter's sweat shops, it's shantys and it's pools of stagnant water with bloated pig carcasses in them. All the major industrialized nations regulate capital for the good of their consumers workers and investors. That's not neo-liberalism, but it's not authoritarian central planning either.
I was simply making the point that socialist policies don't level out societies as you naively and immaturely believe they do. Spare me the emotive babble please, ever heard of 'other variables'? There's a thing called 'history' that explains the differences in living standards in south-east asia and western europe, you might want to check it out.
Indeed they do, and should, but all major industrialized nations are based on liberal, free-market capitalism. Are you for or against this?
I don't beleive socialism levels-out societies. It CAN help to ensure a higher standard of living, and greater economic justice for the people who actually create the wealth. From the history thing I know that the Indonesian Islands were valued colonies becuase they were rich in natural resources and had excellent ports. So they should be rich today, but their not because the WTO drafted their economic policy in the 1970s and now most of their wealth is controlled by foreign companies...
Indonesia is an atrociously governed country with an almost inconceivably corrupt public service, and its corporate culture is dominated by the Chinese. Given its population, it isn't all that resource rich (it recently became a net-importer of oil). It lacks a decent education system and does not have a climate of entrepreneurial spirit. However, the real issue is that Indonesia has been dominated by the military for most of its independent history, stymieing economic and social reform
Neo-liberal and liberal free market policies are different things. The major economies cant afford neo-liberalism, because they need a consumer market, which they cant have if everyone works in sweat shops. They keep those workers in places like Indonesia and China. That's how global capitalism works. And yes, market forces are vital to any successfull economic system. There must be trade, but it must be regulated in a way that prevents vast economic inequality.
You're referring to the American usage of liberal, to mean left-wing. Economic liberalism and neo-liberalism are based on the same principles, the 'neo' merely means 'new' (as liberalism lost favour during the 1970s, then came back into prominence during the mid 80s). The differences in working conditions between Asia and the West are due to differences in the availability and cost of labour, and the level of development and education in those parts of the world, not government policies.
When large countries are in the early stages of industrialization, there is a massive surplus of unskilled labour. This translates to cheap labour. However, industrialization in the long term results in a skilled, educated workforce, which the shrinks the pool of cheap labour. The reason conditions are better in the rich world is that industry is capital intensive as opposed to labour intensive. Workers shift into better paid, service-based jobs, and menial work undertaken using capital inputs.
atlien,what sort of yields should be expected from the AAA's except compost that can be absorbed with more subprime paper before the prospectors down the pan
I hear you. I'm just saying that he doesn't spend enough time explaining how its supposed to work. Which helps people not understand how big a scam this is.
basically the investment bankers took subprime loans and re-sold them to institutional investors at 5 diff. levels/yields based on the expected return. so the AAA people got lower yields but a more security while BBB got higher returns but they took the most risk! hope that helps
It wasn't just "lack of belief" - house buyers entered into these crazy mortgages because they expected house prices to rise. Prices did for a while, but now they are dropping, which means they can't sell the house at a profit, they will not be getting out of the mortgage, and so they will not be able to pay when the mortgage resets to a higher rate.
This stuff is gonna blow up in everyones face. The Fed and the Treasury Secretary said it was "contained", wrong again $2billion blew up in that France bank. I guess helicopter Ben will continue to add $ until there are no more problems at all.
This is basic finance. These are mortgage back securities where the the interest payments and the par value of the bonds are backed by the payments of those mortgages. When people get a subprime loan to buy a house the payments and interests on those loans gets passed through to the investors who bought those mortgage backed securities. When people default on those loans, the investors who purchased those mortgage backed securities do not recieve their interest payments.
"Crash2Deflation2Depression" By 2010-2015=(vs.top) 50-70% off Homes 60-80% off condo+townhouse 80-95% off land,lots,acres 30-70% off commercial(all) Experience=3ups+3downs Deals since 17(thanks dad) 1160% Avg.Gross profits10+yrs 2 year Avg. hold last 10+ yrs 196 Repo deals last 10 years 66 countries Researched & Visited Read 100+ business books/year & 20k+pages/yr=law+economics+finance johnjasonchundotcom
how can you have good credit when loan is $780,000
sha370z 7 months ago
@sha370z They're sub-prime so they generally didn't have good credit.
PCG111111 1 month ago
Try also reanalyzers com
mihaionescuDeo 8 months ago
did anyone watch inside job?
imyourlinkdotcom 11 months ago
How they hell does the yield on the BBB- go from 7.75% to 30% ? That's a gain not a loss. How is that a blow up?
evilclown99 1 year ago
@evilclown99 I expect if you have a bunch of CDOs on your book and no one will buy them unless you are paying 30% you'd be quite fked as an investment bank.
kinkokonko 1 year ago
disinfo piece. The MBS where never actually filled with anything. They are now being filled retroactively with non-performing mortages. That's why you have all the false paperwork with no on knowing who one's what. You can't own a "piece" of a promissory note unless it has multiple payees on it and still consider the note secured.
Silly little lairs. I like glieseman too but he's been duped or is a shill.
thodal2000 1 year ago
Poorly done. Fails to describe how purchasers get paid or dont get paid when mortgagors fail to pay. Misleads saying that performance is based on "faith.". Typical BS.
douglaszargham 1 year ago
USA is suing Goldman Sachs...those bastards at Goldman, bunch of liars and crooks. I wish we could Hang Them
dalecampbl5 1 year ago
I did not understand :(
ZenChat 1 year ago
If anyone shorted this BBB- trauch back then, they made a small fortune. I would say it will happen again.
residentzombie 2 years ago
People have made finance way, way too complicated.
schnappy00 2 years ago
Its designed in this way by the elite for the elite. Actually its very simple as is law but the make a lot of mumbo jumbo to make it look complicated. Same shit goes for a lot of things like whitepapers in IT.
ThoughtCriminal912 2 years ago
@ThoughtCriminal912 The problem is these guys throw around too much terminology
john123757 1 year ago
No, government has made finance way, way too complicated.
residentzombie 2 years ago
@schnappy00 because it's the better to fool others my friend
dalecampbl5 1 year ago
they call them asset backed securities in the uk, like a debt is an asset, and secure
robtherub 2 years ago
You know whats really fucked up? The same people who gained from writing people bad loans knowing they couldn't pay made money before the bailout made money during bailout and they're still making money doing the same fucking thing.
All the while the American workers wages have decreased for 30 years and the banks are profiting from it.
jxh261 2 years ago 3
PRIME RATE has ALWAYS referred to the INTEREST rate a bank charges its most credit worthy customers. SUB-PRIME would be a rate below that...The term SUB-PRIME has NEVER been used to describe the CREDIT RATING of a borrower. "SUB-PRIME BORROWER" was coined to hide the FRAUDULENT MORTGAGES the banks sold. A securitized mortgage is a FRAUD.
goog livinglies
anolmec 2 years ago
This Steve Leisman douchebag was arguing against Peter Schiff passionately on a show back in 2004 when Pete was trying to explain the coming housing debacle 3-4 yrs ahead of time. It's easy to try to explain things after they happened, Isn't it Steve?
frugalite 2 years ago
This has been flagged as spam show
BANK OF AMERICA IS THE MOST CORRUPT BANK IN THE COUNTRY!. Bank of America harassed me, ruined my credit, charged me over $800 in fees over a 10 day period, tried to humiliate me, and never stopped calling my house- all because of $50 overdraft!!
In one day I was charged over $250 in overdraft fees because of a company that took advantage of my bank account- BofA charges more fees than any bank in the World!
mattt1ooo 2 years ago
i smell bs - steve cant explain shit.
its really easy, they gave bad loans, and benefited by taking houses plus bailout.
mboromboroone 2 years ago 3
can we sue the banks who mis interprated and misled the investors into believing that the AAA or BBB ratings were equivalent to convectional corporate/company ratings.
jhaverivivek 2 years ago
"Lack of Faith"
No...the fundamentals were bad for the home owners. One just had to check the 2007-2008 unemployment numbers. If I was CNBC I'd fire them not for doing a sub par Japanese high school presentation on SIVs/MBSs and derivatives but for the retarded conclusion on the matter
nagasako7 2 years ago
So basically, they placed bets on people defaulting on their mortgages.
Would it be too much of a stretch to suggest that some or most of these defaults were manipulated so that the people who placed these bets could make money?
After all, the people who took out these mortgages would start out with a low interest rate, and then all of a sudden it would skyrocket to the point where the y could no longer afford to pay.
It's all a scam.
qmulus1 2 years ago
Cool, now people don't have to pay their mortgages, because, when they are sold, the securities investors are not parties to the mortgage contract, so they have no standing in a court of law. contract.
impalapez 2 years ago
they are some crafty fat cats on wall street. fat and greedy.
sambrown18 2 years ago
this is so much helpful for my upcoming final exam. thankssssss ^^ though there're parts I can't understand :)) Oh my English hichic anyway, many thanks. more understandable than lots of other videos I've watched on Youtube
conngongcon 2 years ago
what we need to understand is they are trying to make the whole world their sweat shop, we will soon be going around the monopoly board with no properties and any money we get from chance or community chest will go right to them.
nflcollector1 2 years ago
Comment removed
shovanovaontop 2 years ago
LIESman is cnbc's GOVT....any govt since it is all ZOG anyway,,,spokesroundmouth!
garyowen4ever 2 years ago
nothing like debt economy the more you spend the further in debt you go. That's what federal reserve notes are debt.
And mortgages are using debt to create more debt, What a scam. Every time there's a recession we buy more debt with debt and go deeper and longer into debt. wow
raypsi 2 years ago
If these subprime morgage intrest rates where fixed for life everybody would be happy.
carmenlee87 2 years ago
Can anyone say ponzi sceme, that is exactly what this is everyone involved should be in same position as Madoff
tinarousseau 2 years ago 7
@tinarousseau idiot!
ABisopht 1 year ago
@tinarousseau this is nothing like a ponzi scheme. you obviously know nothing about structured finance.
pureperil 1 year ago
@tinarousseau I think you need to read what a Ponzi scheme is before making this inaccurate comparison
kinkokonko 1 year ago
what no one talks about is how many bets were made on these mortgages that it would fail, Aig, country wide, fannie mae etc are still paying and will continue to pay these bets and most of them are not even recorded , they are all side bets and the hedge funds have been raking it in- no transparency -fuck private equity they created this crap and they knew the only one who could pay is the taxpayer - no wonder those fuckers are waiting on the sidelines having cashed in - free market my ass
dubmaverick69 2 years ago 2
derivatives are nothing but bets!
thay must be prohibited. if you controll the market, i mean if you own the market you can always know who will win and so make a lot of money (take the money from the non-experienced)
prosvjeta 2 years ago 2
He forgot to mention the total derivatives in question within the US.. some say 600 trillion, some say 1.5 QUADRILLION... thats 30 times the US GDP. lol
bluehorse888 3 years ago
informationauth, you don't know what you're talking about.
powerbookg 3 years ago
Apparently you were asleep last year when this housing mess came crashing down.
I quess I must be talking out my ass.
Go visit the OCC website. Dont rely on me. Go their and then talk some shit at least afterwards.
informationauth 2 years ago
Anybody see a problem with JP Morgan's Derivatives or is it me? Something is up over at JP Morgan. Im like freaking out. When we come out of this mess, I dont think JP Morgan will be able to compete with Wells Fargo and Bank Of America.
Wells Fargo and Bank of America have continuously beat JP Morgan until recently. What gives?
informationauth 3 years ago
hey informationauth:
Can you say lehman brothers?
raypsi 2 years ago
What about Lehman?
Lehman is an investment bank, if they fail, they fail.
JP Morgan on the other hand is a commerical bank. If this bank goes under or starts having problems with it derivatives mess. It's going to be hell.
informationauth 2 years ago
I still don't understand how subprime loans were became AAA.
slickon 3 years ago
The triple A rating has nothing to do with the credit worthiness of the loans. It has everything to do with who is willing to lose their money first. Essentially, the BBB- get the highest rate of return, but they will be the first to lose their money if there is any decline in the security. The next in line to lose their money are the BBB folks, followed by the A, and the AA. All these folks have to lose money first before the AAA folks are exposed. That's what makes AAA "safer."
bcassill 3 years ago 3
The scam is; even with this labeled as triple A security its not triple A at all.
partylwc 2 years ago
indeed partylwc thats what made it so unbelievable. The pure lack of logic makes it so difficult to understand from a rational point of view.
beastinblack 2 years ago
nice explanation.... quite easy to understand. thats the difficult thing, isnt it?!
bembelino 3 years ago
avoid this crap info, CNN,CNBC ,FOX, all distorced info. Search for the independent media on thw web for the truth
vegnagunL 3 years ago
Search FOR UNIFIEDMARKETS
robrown1 3 years ago
fVck3rs!! u jsut give a fvck bout the paper u spend on that shit.... dumbs!
jmatheus 3 years ago
great explanation, however the key element missing was the fact that all of the lending started with the Federal Reserve, the top lender. Also missed was Clinton signing into legislation the law which enabled 2nd level lending institutions (i.e. Lehman Brothers) to begin investing in the same Securities they created, thus blowing the Derivative Market bubble to astronomical levels. Otherwise great stuff.
greenback001 3 years ago 11
@greenback001 The law Clinton sign was The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999 please tell me what party the sponsors of this law were? Gramm–Leach–Bliley. And how many democratic Senator's voted for it?
mrgetrealpeople 1 year ago
Do all of you guys understand this explanation in this video? For me it's like Chinese explained in Chinese. The use of that marker didn't help me much either. Is there a better video somewhere?
ToritoNL 3 years ago
Talking Heads : ) the only good part about this video.
lebode 3 years ago
CUando van a empezar a hablar de economía y dejar de hablar de "papers", "expectations", "feelings". United State economists suck soooo bad.
Leer Spanish, and read our economist. They at least speak over the reality.
blablaII 3 years ago
His final explanation of why they blew up is false. It was not a lack of "faith" but the reality that too many people with mortgages in these derivative packages could not afford their mortgages that they should never have been able to qualify for in the first place. It is all part of the pan to create hyperinflation to get out of debt while wiping out the middle class. 2 more words - BUY GOLD!!!
billvancouver72 3 years ago
@billvancouver: Don't ever buy gold unless you know you will be able to sell it.
Crickettedog 3 years ago
actually.. you got a point there
kiasu01 3 years ago
Former fed chairman Alan Greenspan has been a defender of derivatives since 1999 or before . Did you know that the same guy pushed subprime loans has also pushed derivatives
other regulatory agencies and Congress have taken a totally hands-off approach towards derivatives.
How Big a Problem?
How big is the derivatives market? Worldwide, it is $596 TRILLION dollars *. The derivatives market dwarfs the real market for goods and services, and acts likes an unregulated black market.
Prison?
louis12346 3 years ago
are there any good videos explaining the 600 trillion dollar world derivative problem???
inthebluescrossroad 3 years ago
Search> Not Enough Money in the World: The Real Monster in the Meltdown Closet
This is the ultra-dangerous downward vortex in which the system is locked. It is why share prices are plummeting. As recession deepens, there will be defaults on securitised bonds and the potential collapse of more banks outside the G7 ring-fence. Nobody knows what proportion of the $55 trillion of credit default contracts written will be honoured and who might bear losses running into trillions of dollars.
louis12346 3 years ago
2 reasons for sub-prime lending boom.First,congress made laws prohibiting redlining.Second,massive amounts of cash flowing in from china fueling the loans.
rw5791 3 years ago
There should have been a law against sub prime loans. It's clear the persons giving out the loans knew it was not going to be paid back. They were just out to sell the future bad loans for money. Why are they still walking the street and not locked up?
redviper101 3 years ago 2
The main reason for subprime loans failure was the extreem selfishness of charging higher rates for loans given to poor people as a compensation for the bank for bearing higher risk ...but actually the higher rates was a main reason for increasing the default rates extreemly and the increased risk premuim margin was not enought as a compensation! thats happen in every counrty ... business had no ethics in this world !
Nisreen4HKJ 3 years ago
Some risk they took.
They used crap debt notes to pick the lock on the treasury.
bunnerabb 3 years ago
redviper ,the purpose of subprime ninja was to create the delusions of granderr for those that would believe
a lie,it is the last days afterall,hurt neither the oil nor the wine, a bushell of wheat for a penny and all that stuff that made the secular world scoff as it fell in love with its own smell.
ubornthick 3 years ago
We're in for nasty weather alright, and the grey-suited bastards will do everything to make sure we pay and not them. It will blow up in their faces one day though.
NickOLarse999 3 years ago
Don't get tied up in their terms and game. Watch 'Money Masters' on Google Video.
PeekyBooo 3 years ago
joe & jane, you're IDIOTS why can't you learn to save money and spend only what you can afford! ahem...scuse me.
YourPageantry 4 years ago
The big surprise in the foreclosure process is when the IRS sends you a tax bill on the unpaid balance of the home loan. It's what's known as "forgiven debt". And it's considered to be taxable "income".
What's 30% of $250K?
TYX91101 4 years ago
Do purchasers of sub prime AAA,S Have any right to revenues from the sale of properties that "mortgagees" walked away from , or, are their rights confined to a share of debt INTEREST repayments should there be any
SIMPLY ,do purchacers of the AAA,S OWN either 1.THE GOOSE ,OR 2.THE first right to the GOLDEN EGGS IT ONCE LAID or 3.both
4.WHICH GETS STUFFED FIRST
A THE GOOSE
B The owner of the AAA.S
C.THE BANKS SHARE HOLDERS
D. THE FEDERAL REVERSE
ubornthick 4 years ago
No one is talking about so0lutions I see! LOOKS LIKE ONLY LAROUCHE IS!
Ascendyourthinking 4 years ago
bloody capitalism!
erictjie 4 years ago
Capitalism is an ideal ,in practice we have crapitallism as far as the bankers [to use a euphemism]are concerned
Banking should have its own separate quAAArAAAntine clAAAssificAAAtion within stock markets, such as "connoddities"or"ponzis" till the FED recrapitallises them after they part with their AAA'S
ubornthick 4 years ago
Not capitalism. Capitalism is good and is part of human nature. It is socialism by the FED and Wallstreet if one truly understands how the market is being manipulated by these people. US today does not have a free market economy. It is racing toward socialism and becoming a fascist state.
nemnaisa 3 years ago
You "pure capitalist" free-market types are always blaming all of our economic problems on any and all restraint of the power of capital. De-regulation is partly responsible for the current crisis, but if there's any regulation remaining, even the slightest regulation, then in your mind that has to be cause! Your definition of Socialism is also toally absurd. The FED is adored by bankers and venture capitalists the world over. Are they socialists?
Brooklyn83 3 years ago
You want "pure capitalism" go to Indonesia (85%poverty rate) or this country in 19th century when people worked 15 hours a day 6 days a week for $0.8 an hour. How about the depression that started in 1837? Before the evil Federal Reserve system was introduced. It was deregulation followed by unchecked speculation and greed that caused that crisis.And as far as capitalism being part of human nature, so is sex, but if it's not regulated by mutual consent, it becomes rape.
Brooklyn83 3 years ago
This is how capitalism cleans its mess. You make stupid decision, you pay for it sooner or later. That's the beauty of capitalism.
rosihantu1 3 years ago
Or, you make a stupid mistake and a lot of other peolple pay for it while you retire to the Hamptons with your Porsche, your 25 year-old mistress and lots of cocaine. That's the reality of capitalism.
Brooklyn83 3 years ago
If I retired to the Hampton with my Porsche, then obviously I didn't make any mistake.
The only mistake now is the Feds using my tax money to bail out greedy banks.
Capitalism dictates that irresponsible banks taking ridiculous risk should go bankrupt if their decision turns out to be wrong.
rosihantu1 3 years ago
Look, my point is you won't be seeing anybody who was on the board at Lehman Brothers at the unemployment office trying to get benefits. You will however see a good number of their employees there. The afforementioned board members will probably be in the Hamptons golfing. Now do you see?:0
Brooklyn83 3 years ago
Maybe that's because the board members were already rich in the first place. But if they were holding the shares of the company, I'm pretty sure they stand to lose money as well.
Dude, I hate rich people as much as you do. But I have no sympathies for the normal employees of Lehman Brothers either. They derive their income from the same greedy practice of their company. You live by the sword you die by the sword.
rosihantu1 3 years ago
I think you're confusing the term "capitalism" with many other societal and political systems and problems. Unfettered speculation in land is due to gov't policy of granting title to unused land to speculators instead of homesteaders. Industrial revolution factory worker conditions due also to people not having access to capital in land. You're absolutely right about the evil Fed system. But capitalism refers to free trade only. It does not assume unjust political and social conditions.
OgeronimonominoregO 3 years ago
"Free trade" without any kind of legal or regulatory boundaries, will always breed rampant speculation and corruption. The market can easily be manipulated, cornered and coerced (a term libertarians love to use) into going in whatever direction the money people wnat it to. The Federal Reserve System is just one way their doing that. Take the word Federal out and youll still have the same thing: a group of privately owned banks ripping everyone off. capitalism is corrupt, government or no.
Brooklyn83 3 years ago
That's hardly a meaningful reply. If you define any system as being "without any kind of legal or regulatory boundaries...", then of course it will lead to bad things! How can you conflate force and fraud with a person's right to produce and trade ethically? You're just defining free trade as criminal and lawless, which is irrational.
Why do you think fractional reserve banking
would exist in a free market? Who would be stupid enough to accept their phony currency?
OgeronimonominoregO 3 years ago
Capitalism is not corrupt. People are. Capitalism is the best way we have of managing our innate deficiencies. For close to a century attempts have been made at putting alternative systems into practice. All failed dismally. There will always be some degree of hierarchy in a society. Capitalism at least allows people some scope to improve their lot, instead of them being dooming to whatever social/economic role the politburo assigns them to.
disdanic 3 years ago
Don't insult my intelegence by telling me that the only alternative to neo-liberal capitalism is Stalinism. The fact that there has always been a "degree of hierarchy in society" is no excuse for the widespread inequality and exploitation which exists in all 'free market' systems. Even a little socialism, such as that seen in Europe, goes a long way in improving the quality of life for the masses and even helps the market in many ways.
Brooklyn83 3 years ago
Oh yes 30% youth unemployment in the slums of Paris, nice work socialism. Miserable economic stagnation has marked Europe for more than half a century. Their present successes are attributable to the creation of a single, free market under the EU.
The only alternative to neo-liberal capitalism is authoritarian central planning. Yes, this comes in vastly varying degrees, but it is the only way of allocating resources without a market. I suppose you fancy yourself capable of the top job?
disdanic 3 years ago
So Western Europe is a monsterous hell for the people unfortunate enough to live there? I suppose neo-liberal Indonesia is a paradise then? I'll take Paris over Jakarta any day, myself. What with the latter's sweat shops, it's shantys and it's pools of stagnant water with bloated pig carcasses in them. All the major industrialized nations regulate capital for the good of their consumers workers and investors. That's not neo-liberalism, but it's not authoritarian central planning either.
Brooklyn83 3 years ago
I was simply making the point that socialist policies don't level out societies as you naively and immaturely believe they do. Spare me the emotive babble please, ever heard of 'other variables'? There's a thing called 'history' that explains the differences in living standards in south-east asia and western europe, you might want to check it out.
Indeed they do, and should, but all major industrialized nations are based on liberal, free-market capitalism. Are you for or against this?
disdanic 3 years ago
I don't beleive socialism levels-out societies. It CAN help to ensure a higher standard of living, and greater economic justice for the people who actually create the wealth. From the history thing I know that the Indonesian Islands were valued colonies becuase they were rich in natural resources and had excellent ports. So they should be rich today, but their not because the WTO drafted their economic policy in the 1970s and now most of their wealth is controlled by foreign companies...
Brooklyn83 3 years ago
Indonesia is an atrociously governed country with an almost inconceivably corrupt public service, and its corporate culture is dominated by the Chinese. Given its population, it isn't all that resource rich (it recently became a net-importer of oil). It lacks a decent education system and does not have a climate of entrepreneurial spirit. However, the real issue is that Indonesia has been dominated by the military for most of its independent history, stymieing economic and social reform
disdanic 3 years ago
Neo-liberal and liberal free market policies are different things. The major economies cant afford neo-liberalism, because they need a consumer market, which they cant have if everyone works in sweat shops. They keep those workers in places like Indonesia and China. That's how global capitalism works. And yes, market forces are vital to any successfull economic system. There must be trade, but it must be regulated in a way that prevents vast economic inequality.
Brooklyn83 3 years ago
You're referring to the American usage of liberal, to mean left-wing. Economic liberalism and neo-liberalism are based on the same principles, the 'neo' merely means 'new' (as liberalism lost favour during the 1970s, then came back into prominence during the mid 80s). The differences in working conditions between Asia and the West are due to differences in the availability and cost of labour, and the level of development and education in those parts of the world, not government policies.
disdanic 3 years ago
When large countries are in the early stages of industrialization, there is a massive surplus of unskilled labour. This translates to cheap labour. However, industrialization in the long term results in a skilled, educated workforce, which the shrinks the pool of cheap labour. The reason conditions are better in the rich world is that industry is capital intensive as opposed to labour intensive. Workers shift into better paid, service-based jobs, and menial work undertaken using capital inputs.
disdanic 3 years ago
This is not a very clear explanation if you are a layman. He doesn't spend enough time on the page with the yields.
atlien991 4 years ago 2
atlien,what sort of yields should be expected from the AAA's except compost that can be absorbed with more subprime paper before the prospectors down the pan
ubornthick 4 years ago
I hear you. I'm just saying that he doesn't spend enough time explaining how its supposed to work. Which helps people not understand how big a scam this is.
atlien991 4 years ago
basically the investment bankers took subprime loans and re-sold them to institutional investors at 5 diff. levels/yields based on the expected return. so the AAA people got lower yields but a more security while BBB got higher returns but they took the most risk! hope that helps
txredeveloper 4 years ago
Basically correct but there's a much better illustration of this scheme in the August 27 issue of Time magazine, if you happen to find one.
TYX91101 4 years ago
Go read the news at the Mortgage Lender Implode-o-Meter and Hedge Fund Implode-o-Meter. Perform web searches to find the sites.
tyronebiggums3 4 years ago
Prepare how? Make some sandwiches? Bring some clean underwear?
Led7Zepp 4 years ago
It wasn't just "lack of belief" - house buyers entered into these crazy mortgages because they expected house prices to rise. Prices did for a while, but now they are dropping, which means they can't sell the house at a profit, they will not be getting out of the mortgage, and so they will not be able to pay when the mortgage resets to a higher rate.
Green7Hornet 4 years ago 2
This guy has a talent with explaining complicated things simply. He did this for Yen Carry trades too. Awesome!
armcrash 4 years ago 2
This is a great video to simplify Mortgage Backed Securities...
armcrash 4 years ago 2
This stuff is gonna blow up in everyones face. The Fed and the Treasury Secretary said it was "contained", wrong again $2billion blew up in that France bank. I guess helicopter Ben will continue to add $ until there are no more problems at all.
mediaboyz 4 years ago
Oh boy....the proverbial shit is about to hit the fan!
JoeDebtor 4 years ago
sounds like how they grade meat quality. You get what you sow. How makes the profit of the subprime meltdown somebody must be laughing to the bank
gizmosells 4 years ago
MORTGAGE INDUSTRY EXPOSED!!!!!!!!
What every borrower must know
rmdirect . net <--- web site
dsholmes23 4 years ago
This is basic finance. These are mortgage back securities where the the interest payments and the par value of the bonds are backed by the payments of those mortgages. When people get a subprime loan to buy a house the payments and interests on those loans gets passed through to the investors who bought those mortgage backed securities. When people default on those loans, the investors who purchased those mortgage backed securities do not recieve their interest payments.
jas0609 4 years ago
repo4sale 4 years ago
we're in for nasty weather
speculativebubble 4 years ago
All down to the thieving moneylenders and international financiers!
rodpolisher 4 years ago
Ohhhhhhhhh SHIT!
mattsta1964 4 years ago