Black Jack Analogy to Explain Financial Crisis

[nintendokings]

The USA is too liberal. Period

[publicatdamagnificen]

The Jews, the Jews the Jews"....Damn, why do we always blame those people for everything?

WELCOME TO THE AMERICA:

" If something is wrong blame it on the Jews, Blacks, Liberals, or Atheists".

[TriaMaxwell]

@publicatdamagnificen I prefer to blame Christians.

[shasha1873]

He is right. And they were all fucking Jews! They did not learn a lesson from WW2. Unbelievable.

[redcommand85]

I actually don't disagree with this guy here, but you need to ask why the financial institutions are able to create such risky propositions. It is because of the Federal Reserve and its printing of to much money and keeping interest rates to low which encourages reckless lending. If we didn't have that corrupt institution manipulating our currency we would certainly still have problems but not a disaster like this.

[GeneLightt]

wow this guy is dumb

[Hazmat347]

Ah Ha! the Bernie Madoff Theory!

[EnterNameHere55]

the free market system dose not work for two simple reasons people are stupid and people are greedy, regulation saves people from themselves sadly

[RussellsParadox]

And since politicians aren't people, government is immune to those problems that only we humans suffer from.

[oldhacks]

you're confused cenk. it was Bill Clinton repealing the glass steagall act that gave them permission to bet with OUR money...

[sabiki74]

The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by Republican majorities on party lines by a 54-44 vote in the Senate.

Read the constitution. There are three branches of Gov't.

[oldhacks]

there should be Four. thats whats wrong with this country.

[donerlich]

Dude, I read this as Jack Black analogy and was waiting for a funnny video of him explaining the financial crisis. Doh!

[Piko6262]

me too! Bummer :p

[keshiz99]

ne too!!!!!!!11

[EtcEtcAndEtc]

mi 2

[SicSolution]

@donerlich Yeah same here, I guess we suffer from dyslexia :S

[metalrox555]

@donerlich I did the same exact thing xD

[IAMHEATHLEDGERZ]

@donerlich

Speaking of which, shouldn't "Blackjack" be one word? Sorry if I'm wrong on this.

[DJEN33]

Exactly.

[glamourknight]

I always love it when cenk says, "Of cooouuurrrse".

[Encyclopeteia]

Best analogy ever!

[rabbaj]

See khanacademy's YouTube videos...he does an excellent job explaining the financial meltdown. In real simple terms.

[MainstreetEconomics]

It turns out the financial crisis was actually my fault. If you care to see what happened I have a video confession on my You Tube channel.

[kybygbwtgb]

lol. cenk. "of coooourse!!!!"

[MojoJuana]

a scam conjured up by the head scumbags on wall street with the help of the politicians in their back pocket.

unacceptable!

[projectdurden]

I have a margin account and i learned the hard way when i lost in the stock market. now I'm even.

[mites7]

this was an extremely good analogy

[zorath1970]

That's why W. Buffett calls derivatives "financial weapons of mass destruction", because of the cascading defaults that can happen.

[zorath1970]

Derivatives have been around longer than just this decade. They were originally designed to hedge against a risk, such as interest rate, exchange rate, general price levels, etc. When they started to use them for speculation, then the trouble began. Derivatives rely on a counterparty to perform their half of the contract. If that counterparty becomes bankrupt or insolvent, they will not perform, and you get stuck. Then you stick the guy you're obligated to, and so on down the line.

[CervantesVI]

I thought it said Jack Black analogy. Damn dyslexia.

[awolfeld]

lol same here. wishful thinking, this guy is great though, i totally get it now.

[shoujokakumei39]

haha i totally thought that too! lol

[VytaminDProductions]

You are 100 percent correct, that is exactly what happened. The federal reserve uses debt to control all aspects of the world. If you read the dollar bill, all you are actually holding is debt, you have to pay that dollar back to the federal reserve one way or another, you never actually own anything.Instead of saying I have lots of my, people should say I have lots of debt.

[crowdaddy13]

a better analogy is you can spend 75% of your paycheck towards your house payment instead of spending 30%......thats why you see so many people who make $12 an hour in $200k houses and are now going under.

[cellardoor70]

the key part is not that it wasnt their money. Thats how banks work, they borrow our money, it's never been their money to begin with. The key part is 'the higher the bet the more u get paid', that was the criminal incentive to purposedly inflate the bubble.

[SpiritualAtheist]

But Cenk, you're assuming these guys are in it for the money.

;)

[goonsmile]

while we were playing checkers these executives were playing chess

[BlackUniGryphon]

So, all that money never actually existed. It's fictional value.

[bjahava]

Exactly...

[theaphexxtwin]

im sorry cenk, but you really have little understanding of what is happening. of course this is a small part of the problem, but it is a small fraction of it.

but the dollar is totally fucked

[coffeebuzzz]

He's pretty much spot on with that analogy.

[upabittoolate]

and you have an understanding? evidently not. that small fraction about which you speak it prime derivative of a larger calculus function. he's absolutely correct. but what do you care? you work for pounds

[theaphexxtwin]

well upabittoolate, i care because if the dollar collapses, other econemies will too. Also, i trade in dollars and US stocks as well as others. As for what understanding do i have, maybe more or maybe less than you. I do it for a living and im one of the few who still break targets week after week. your econemy is fucked because it is based on consumption through credit. no credit, no consumption, no econemy. simple. if u made more things to export u could recover. you dont so you can't. simple

[upabittoolate]

well then you know that your theory is actually predicated on his theory. the US doesn't export because goods are cheaper in many country & higher quality in other (while remaining competitively priced). so manufacturing & labor is exported so there's no more concrete capital to fall back on. BUT, all this is based on a credit system. so you're correct that there's nothing to recover but your assessment that his analysis is wrong. his take may primitive but he's still spot on.

[LastOptionPils]

That's the perfect analogy.

[1mediaseeker]

It's my guess the dollar is going to be worth absolutely nothing by next year. Thus giving governments the opportunity to introduce a new currency that will be used in Canada, US and Mexico. New currency=the Amero.

For the people, it will mean a huge "elbow from the sky".

[zhuqi315]

nah the dollar is not gonna be worth absolutely nothing, the government will not allow that to happen, china will not allow that to happen, the rest of the world will not let that to happen cuz right now most of the world's economy is based on dollars

[Nuurzhaelan]

Cenk, you are the man!

[chisacat]

I thought the title was alluding to being hit on the head with a black jack club - coshed , robbed LOL

guess a lot of us read it wrong - although the economy is in succh dissaray its like being beaten over the head with a black jack ..

[stuffisgd]

Hit me.

[franksnow79]

sort of; they didn't just loan this money to any joker. Supposedly, you still had to prove assets or income to get this sort of loan. Not to get to technical, but credit default swaps are to real estate roughly what options are to stocks. When the market moved to sharply in one way(down, though a similiar movement up would have done it to), the companies backing them up couldn't cover the contracts. It's as if an insurance company got him with too many claims all at once.

[XNickX]

awesome example

[Namari12]

Actually, I think the real big law that changed the regulation was the 1999 repeal of the Glass-Stegal act, not this 2004 law. But this is an interesting point.

[robbe21]

Good point at the end about making incentives; the market players WILL act in accordance to them. Also, in many cases they didn't KNOW what they were betting and what the risks were, because they often used manipulated "instruments" in which the actual risks were deflated by corrupt rating agencies.

[tetranoob]

The more you pay a ratings agency the better rating you wil get :o)

[robbe21]

Exactly!

[Realizalize]

derivates as sojbeans are likelly traded 16 times,

from the field overseas to the consumer, and the price, that it has then may keep the producer of the beans hungry for a decade.

[Stormwern]

Good analogy, except there is no responsible way to bet on blackjack.

[Aangfromlaguna]

OFFFCCCOURRSEEE

[darealdjnutz]

I love how we seize drug dealers assets but let these criminals walk away with millions and billions.

[bigmoney714]

we are going down. Wake up ppl. Stock up on food. Everything will skyrocket. Gas and food will be outraegous soon.

Pray

[Krumbz2003]

LMFAO! What???

[bigmoney714]

we are about to go into a depression. the dollar isnt worth squat. gas and food will skyrocket. I bet my house on that

[Gtor3636]

What is your rationale for that? I think your logic is pretty flawed.

[bigmoney714]

o really. did u know the fed cut the rate to a historical level. Did u see how much it fell since then? Do you know any good economists? Do you know how much debt we are in. Do you know what these "baiouts are doing to the economy?

[Gtor3636]

As a matter of fact I am very well informed on all the current issues in regards to the US economy. I asked what your rationle was and you responded with no hardcore evidence to back up your statements. The fed cut its rates to stimulte a dull economy and Bernarke is recieving worldwide praise for his actions. Before we all flail our arms in disarray lets wait to see how our new president moves forward. Obama is looking to recreate the "new deal" in an environmentally freindly manner.

[bigmoney714]

u r crazy or just work for them. everything that is being done is just insuring a major depression. The new deal didnt even bring us out the 1st depression. Check ur facts. Obama isnt gon help us. He wants a huge stimulus package. Washington is creating major inflation.

[Gtor3636]

You just sound like a moron when you say "stock up on food and that gas will skyrocket" when OPEC has lowered a barrel to less than $40. Use your brain before you make dumb comments. If you actually did your research you would know that all most major currencys are low. BoJ and BoE are also cutting their rates just as dramatically as the US. Sorry man but you sound like Chicken Little.

[bigmoney714]

I wont be the moron rioting when u and others find out youve be looted and your dollars wont get you much. All currencies are low cause its a global thing and the dollar is the world reserve currency and the dollar is dead and bring the world down with it. You can think everything is ok if you want to but I guarantee sometime next year u will be mad u didnt listen to me instead of the TV

[Ddubb925]

i read the title quickly and i'm thinking.. how is he going to compare the financial crisis to jack black?

[CrocodileMonkey]

lol. It isnt very funny?

[jesse1018]

I guess we're both dyslexic cause I thought I saw the same thing

[marcomariaz26]

yes. i saw the same thing. lol.

[Gtor3636]

Very odd. I too saw the same thing. Clearly means Jack Black is being marketed effectively.

[canucksfan94]

Hahaha I did the same thing!

[uberfreak9]

The only explanation I have for this phenomena is that we all saw the capitalized first letters and our brains translated that into Jack Black the actor by a second order memory association. Amigos, we are operating at a higher level. :^)

[Gisburne2000]

Weirdly, I did exactly that - I thought I saw 'Jack Black Analogy to Explain Financial Crisis' and instantly clicked to view, wondering where Cenk was going to take it :o)

[robbibt]

Haha. :D

[ynadiv]

so did I .... weird

[luisagarcia1991]

why cant we sue those who put in that law?? Fuck the rich they always steal our fuckin money. where is our justice!!!??

[stafax]

I read the title of this video wrong, I thought it said "Financial Crisis Compared to Jack Black"

[baddmanaz]

...or even worse: coulda read it "Black Cenk".

[mitchholtby]

Me too; until he said black jack, I was waiting for the comparison..

[baddmanaz]

good one