The reason that so many people couldn't pay their mortgages was that they were sub-prime. So, many had ARMS (adjustable rate mortgages) where the interest rate exploded after a couple years, far beyond the ability of the home owner to pay, or Balloons, where after 4-7 years they had to pay back the entire mortgage in one lump sum. They were told not to worry about the ARM or Balloon because they would be able to refinance. As the market started to go bad, they couldn't refinance.
This is ok until the 6:47 mark, there the lies or omissions begin there. It wasn't the banks, lenders, investors that pushed risky loans, it was the Government created this mess, it was the Community Reinvestment Act created by Jimmy Carter, pushed by Bill Clinton, that started it. It told banks and they MUST give loans to people who didn't qualify
@coliwood Political bull! Blame the Gov't for letting private sector create this mess is bull. Too much or too little regulation--the Gov't is to blame is bull. Look at the timing of it all. The housing market didn't start heating up until after the dot.com bust (post-2002)--way after Carter and Clinton. Greenspan said he was wrong to Congress--he, Summers, and Rubin prevented the CTFC from regulating derivatives. A classic, systemic bubble--it popped in our face & ate our lunch!
@Dave2170 Here you dumb fucking idiot: "Fannie Mae Eases Credit To Aid Mortgage Lending" Setempber 30th 1999. The bill was passed by Carter, enacted by Clinton. Hell we are on YOUTUBE their are TONS of video showing the Clinton administration and the Dems pushing it. I just hate when a dumbass, who is too fucking lazy to read or research anything, comes at me with talking points. I don't even know why I showed you the article, it is not like you ignorant ass will read it anyway.
@coliwood Thank you for your kind and informative response. Those were not talking points--they are my thoughts, My point is that your opinion is political bull and it doesn't matter that the laws changed or, my point that Greenspan and Summers and Rubin prevent regulation that might have prevented the mess. It is in the past. The posted video is true and well worth watching. Based on your F-ing, I know I made my point. POLITICAL BULL and Insults! LOL
The Federal Reserve system and the government keep rewarding this bad behaviour with bailouts, which is the saddest part of this. The common man still has all his problems while the banks are well taken care of. What a sick society this is.
I think this is a good video, but I think when you get to the part where you say it all goes dark...
You should explain how the liquidation of the debt triggers a market correction.
Right now they are trying to get the old system running again, but everyone knows it will crash and the system is flawed from the get go.
At the end where it says nobody wanted the worthless houses (at least what they were valued at) the government came in and said WE'LL TAKE THOSE PIECES OF CRAP!
Wow, so its all about WE THE PEOPLE not being responsible. We must all bear the price of bad investments, cheap credit, etc. As much as the Fed is unconstitutional and corrupt from its core, we the people are also responsible for wanting to get on the gravy train and not want to take responsibility. War spending, welfare, its all coming to an end just as the housing bubble. It will be painful but we can get through it. Hopefully we can get Ron Paul into office and at least make it bearable.
In a National Socialist goverment people will be healthier and live longer due to National Socialist body culture. People will pay tax for longer, spending on old people will go down and so will spending on Hospitals. Banks in NS will control printing of there own money and banks are nationalised. People will learn a good work ethic and not depend on state support. All production at home means jobs and income for people and state. And no country will have power over a nother. NATIONAL SOCIALISM
@Dethreid Firstly n Korea is communist not Fascist secondly. In a communist state the state builds it and makes people work. In a fascist state, the state builds but then lends out to the people and puts people in charge so there are no tradeunions but the state as a holle is the trade union. sounds like communism but its not. Second i said litle traid, not no trade what so ever. third you can take n korea as an example, i will take all the fascist ww2 countrys where actually workt
The only way a country will never go in to a recession is with National Socialism. In NS the country will not depend on trade but agriculture that is done localy this will always create jobs and Nationalised factorys. The state will control the amount of factorys geting built and create jobs and goods. This way not buying from outside and keeping jobs in the country. This is not like communism becuase communism is international that belives in freetrade. This is why Germany in 1940s was great.
The Federal Reserve is a foreign owned private corporation and needs to be thrown out of the USA along with NATO, the UN, the Bilderbergs, the foreign owned Trilateral Commission, the foreign owned Council on Foreign Relations, the foreign spy agency called the Israeli Embassy, along with the foreign president....Obama.
Great video, very concise and interesting, but it can be made better by explaining more on how CDOs work (which is actually by 'passing on' the loans of homeowners from banks to investors), and mentioning about rising unemployment and inflation which actually led to the initial defaults on payments.
Some argue "true capitalism" is needed, or "true socialism" or "true communism". Well, ALL OF THOSE "ISM" ARE THE SAME CRAP! They all rely on the money/debt game. Money has become the greatest "divide and conquer" devise ever imagined. The whole system must be overhauled to a Global Resource Based Economic System as explained by 95 year old Jacque Fresco, creator of The Venus Project. Otherwise we have no hope as a species destroying ourselves and the whole planet with our rampant consumerISM!
This is not the truth, only part of the truth. It worse. The SEC was destroyed, Henry paulson destroyed Lehman bros.. The defaults was caused because of the high interest rate these people have to pay. . These were liar loans. The poorest people had to pay the highest interests. As usual the criminality is forgotten and poor people scapegoated.
This would not have happened if simply the loans were made to credit worthy people at , this is the key, REASONABLE RATES.
A good description of financial crises. It explained each and every possible situation with great pictures and relationship of how of how it worked..!!
EXCELLENT explanation. The best I have seen so far. I read about it and my eyes spin. I am math challenged anyway so learning this stuff is well I'd rather jump in quicksand. Very hard for me to understand but I do to a degree. I am going to forward this to people I know do not have a clue. At least I try but many give up and think it's the middle classes fault ... NO WAY...these banking and lending and Wall Street maniacs made out like a king and laugh all the way to their bank ON US!
Excuse me! I am learning Economics @ University too. I find this one really useful because of very well illustration. However, to people in countries where English is not the mother tongue language, it's quite hard to understand this thoroughly. Then, could you please enclose with it the script ?
It is not so much the interest, as the interest on "created" money. Normal production keeps up with the inflation of the money supply from normal interest (primarily because borrowing becomes more expensive if there is less "stuff" to back it). Production cannot keep up with the interest on an enforced fractional reserve fiat currency.
BREAKING NEWS -- Hear me people tell your friends tell everybody the bank will never tell you the truth. NEWS--BANK RUN -TRINIDAD AND TOBAGO WEST INDIES, REPUBLIC BANK, ROYAL BANK, FIRST CITIZEN BANK and SCOTIABANK thousand of customers simultaneously and secretly are withdrawing all their funds, because they believe that the banks might go into bankruptcy, or insolvent and that they the customer will lose all their money.[ Global financial meltdown].
@1241GIBEK well can not change this fact as it is in human's nature but the problem comes from the FED cuz as u see from the vid they lower the intrest % down to 1% and gave money as a credit, if they stop doing this then there would be no problem. You only buy what you can aford, how simple is that. FED should give money only to ppl that want to start a productive business not a finansial institutions.
@stasisnu18 I guess because they were keeping houses as a collateral therefore they can sell it to people who are even less responsible(as no credit rating or any other documents were required). Its obvious that they would default at a later time because mortgage is probably a large proportion of their income. A slight fluctuation in income can cause a default. And selling to a lot of people like these is the ignition point.
@stasisnu18 The video doesn't state that EVERYONE can't pay their house, just implies that there are always SOME families that suddenly can't pay their mortages. You've forgotten that is the global market, as well as PERSONAL issues, that may cause a family to go through rough financial times.
@stasisnu18 scenario: you buy house at 400K. Its now only worth 200K. Your choices : A) pay the mortgage on a 400k house that's worth half that. B) just don't pay it and move on.
that's why there's alot of people just walking away from homes even if they can afford it.
Great video, the only thing I would add to it is how banks bribed rating agencies like S&P to slap AAA on crap CDOs so that private bankers could buy credit default swaps on the mortgages they knew were likely to fail anyway. It's like a bookie tricking everyone else to put their money on the bad team while he goes around and puts all of HIS money on the team he knows is gonna win...
One thing you missed, the government pressured the banks to give out subprime mortgage loans so that poor and minorities would have greater opportunity to get them. What a stupid idea. Don't give money to people who can't afford it. Also the SEC which is run by the gov turned a blind eye when all this was going on. It's all a big scheme. Plus thank Barney Frank and Chris Dodd for a lot of these problems.
@jpzxcvbnm Not really, banks gave out subprime mortgages willingly, and made billions selling them. Note that in the aftermath of the crisis, the rich got richer while everyone else got poorer.
The part you left out was when politicians figured out that they could buy votes by forcing banks to expand the sub prime market and offer mortgages to unqualified home buyers on the basis of race in order to pander for votes. You kind of made it sound like the banks went momentarily crazy and got together to make huge loans to people they absolutely KNEW had no possible way of every paying them back. This crisis is a result of an ignorant, entitled population and a corrupt federal govt.
@carven2004eca They come from the federal government first coercing the banks into making these sub-prime loans in the first place so they could fool minority communities into thinking democrats care about the little guy, and then those same politicians realizing that the deal was going to blow up in their faces before they could safely retire, so they figured, "Hell, let's just fleece the so called rich for it...class warfare ALWAYS works, right?"
@MisterAsshole2U 1. No-one forced the banks to make those ludicrously unsafe loans.
2. No-one forced the credit rating agencies to rate them AAA on the assumption that house prices would always go up.
3. The reason the gov't decided to securitise these mortgages was more a symptom of your particular brand of corrupt, real-time democracy than any kind of ideology.
One thing I wish had been mentioned was that Wall-Street was encouraged to take the risk and create these bombs because the Government, Through Fannie/Freddie, subsidized their loses. So the banks didn't worry about the time bomb as they would be bailed out should the bombs go off.
remember when America wasn't so greedy and it was a nice little democracy that was proud to be great and independent and everyone was happy .... me neither
How did this have anything to do with greed? The system has brought us the highest standard of living in the world in spite of this.
The majority of sub-prime mortgages were owned by the gov't subsidized (for some uncanny reason) Fanny Mae and Freddie Mac. So much tax payer money was added to these "private" companies that they owned almost exclusively sub-prime mortgages.
With normal capitalism, smart investors don't follow such high risk, and those that do go bankrupt
Greed is bad, but only stupid people can afford to be greedy. Intelligent investors put there money in either safe or semi-safe investments. Just like on the stock market.
Greedy people in the stock market or hedge funds go bankrupt on a regular basis.
Just like idiots spending their paychecks on lottery tickets. Greed is a trait guarantees poverty.
However, when tax payer money is subsidizing greed (corporate socialism), stupid, risky investments are rife.
@shaunikko Actually, democracy and capitalism do not have a lot to do with each other. Furthermore, greed, when at the mercy of consumers (as it is in capitalism), is a tremendous force for individual happiness.
the banks paid the rating agency to give AAA ratings to ALL the mortgages. And leverage is lending money you dont have, in other words, until the homebuyers signed the loan documents, THE MONEY DID NOT EXIST! And this was the plan from the beginng, this didnt just "happen". everybody goes bankrupt?? except for the CEO's of course. But guess who's left holding the bag?? All of us, not wall st, they all got big bonuses this year!!
@zeinfell What you fail to understand though, is that if the US goes down the entire world goes down.
Yeah it sucks for the rest of the world that their economies will be shattered because the USA can't get its shit together but thats the way it is. There is absolutely nothing to be happy about. No matter where you live, you will be affected.
First America bombs the middle east and creates a shockwave of massimmigration into Europe, which is in it self an economic crisis, then they fuck up their own economy which is intertwined with the global economy, creating an even bigger economic crisis in Europe. Thank you America! Now we have European Union trying to transform Europe into a new United States and remove the entire democratic system. There's a shitstorm of FUCK coming soon. We're all screwed
99% of you will probably not even read this... but i just turned 13 and i am trying my best to become a cow. The 26th of december im traveling to the wide open fields of Texas to hopefully learn from the best cows. Being a cow means alot to me. i've just about started my training. I have nailed old-day irons to my feet (really hurts) and tattooed myself to look like a cow. It would mean the world to me of you supported me
Thank you Fannie May and Freddie Mac for pushing housing for people that could not afford a house. If you do a little investigation, the Democrats that ran the operation and said there was no problem is the root cause ( can you say Barney Frank? ).
@Channel58 Hey, I'm trying to find out more about what you're saying- From this video it seems that it was the greed of the banks who didn't understand they were venturing too close to the edge of danger and kept giving mortgages for the sake of making more $. My suspicion is that it wasn't government that "forced" people to have mortgages as much as this was the excuse banks and government used to "Deregulate" the market and in so doing, made big $ for the Democratic party- am I wrong??
If you want a better explanation not that this one was bad you NEED to go watch the movie Inside Job. Its a great movie and gave me the understanding to explain the crisis to my father who is a business consultant making six figures
@Willfoster1990 - "Catholic?" No. This is to represent those below the poverty line who reproduce faster than the "responsible" homeowner. This is very endemic in our society. And hinting subtly that many people have more children just to file for extra welfare.
My fave bit was just after 7:13. 'Instead of lending to responsible homeowners, they lend to irresponsible ones'. Then a picture to represent irresponsible homeowners as fat, smoking and (??) catholic.
Great video, so easy to get. And still Wall St. doesn't want to be regulated so they keep doing this again, and so many others criticize the protesters and tell them to shut up.. irony is amazing!
I tell you what I learn when credit is cheap you create infrastructure to create goods. When hyper inflation happens you then have the infrastructure to sell your products at the high prices and then pay your loans that are on cheap interest. After a cycle you own all that infrastructure and have great credit to earn even more. This my friend is how you ten fold your money in ten years.
@WhenYouveGoneGuru we don't. We are going to need to get rid of the corrupt corp. and dumbass congress, but notmany ppl support ows because they dont fully understand itan ron paul can help us too, but no one listens to his message either. Ron Paul 2012
so, mr gonzales you work at burger king and make 13,000.00 a year and want to buy a 1,000,000.00 home with no down payment and no credit history. sure thing little buddy. we will just say you really make 13,000,000.00 becasues you are also a day traders on the side. no worries nobody really checks this loan app. oh you dont read english or speak it. no problem i will show you with sign lenguage. see my middle finger it represents me and the fist with my other hand represents your asshole.
so, mr gonzales you work at burger king and make 13,000.00 a year and want to buy a 1,000,000.00 home with no down payment and no credit history. sure thing little buddy. we will just say you really make 13,000,000.00 becasues you are also a day traders on the side. no worries nobody really checks this loan app. oh you dont read english or speak it. no problem i will show you with sign lenguage. see my middle finger it represents me and the fist with my other hand represents you asshole.
The ROOT CAUSE of the crash was LAND. Debt after debt was poured into land because it was not taxed. Gains in LAND are tax free. Loans can be secured against LAND as if repossessed the lender pays no tax on the LAND. So much money was poured into land rather than enterprise that it fell over and took all with it.
SOLUTION: Tax the VALUES of all land and its RESOURCES. Not the house (the CAPITAL), the LAND, ALL LAND, even fields. This means no Income Tax. Look up Geoism.
somehow the solution is never to remove the 'interest' in the credit system which is proven to somewhat systematically contribute to this global financial crisis. Had the banks foresee this, they would've reconsider taking profit from giving loans or approving mortgages, as a result there won't be anyone buying things they couldn't afford.
It is not so much the interest, as the interest on "created" money. Normal production keeps up with the inflation of the money supply from normal interest (primarily because borrowing becomes more expensive if there is less "stuff" to back it). Production cannot keep up with the interest on an enforced fractional reserve fiat currency.
It is not so much the interest, as the interest on "created" money. Normal production keeps up with the inflation of the money supply from normal interest (primarily because borrowing becomes more expensive if there is less "stuff" to back it). Production cannot keep up with the interest on an enforced fractional reserve fiat currency.
@blahtoausername depends..might as well write off any unsecured debts and keep the money to buy self sustaining type stuff...the bank prolly doesnt really own ur mortgage as they likely sold it as part of some derivatives package...doesnt mean they wont eventually send armed sheeple by the dozens to get u out of the house if you default, tho
The time has come for us all to seek truth and stop tolerating deception and division once and for all. Without the truth, there can be no real morality, justice, equality, unity, success, freedom, love, security, peace, spirituality or even survival. Only the truth can stop the wars and make the world the paradise it can be. Search for "Truth Contest" in Google and click the 1st result, then click on "The Present" to open it. What it says will transform us and our world.
@403woak When we put someone in jail or prison, the taxpayers pay for their meals and comfort. Jailing is not the solution. All we can hope to do is remove these leeches from positions of power, and watch them struggle to obtain jobs that require skill and proficiancy at something other than speaking to crowds. Economies are ciclical, but that doesn't mean they recover indefinatly. Every Fiat currency in history has failled, the solution to this problem is to get rid of the Federal Reserve.
@gottimw or you can hold the people accountable in congress who let this happen, and put restrictions on so this does not happen again? so you rather go down with your pride and become homeless? the banks only did this where they had to go to make money... they are entitled to make profits, they are entitled to give money to their shareholders. you REALLY think they'll do this again? cmon now
why don't you do more videos like this? this is great explonation
nozg3 16 hours ago
The reason that so many people couldn't pay their mortgages was that they were sub-prime. So, many had ARMS (adjustable rate mortgages) where the interest rate exploded after a couple years, far beyond the ability of the home owner to pay, or Balloons, where after 4-7 years they had to pay back the entire mortgage in one lump sum. They were told not to worry about the ARM or Balloon because they would be able to refinance. As the market started to go bad, they couldn't refinance.
CAprofessor 1 day ago
Does anyone know how to make an animation like this one?
Waketylerjenkins 4 days ago
Very good explanation,
mossimock 1 week ago
This is ok until the 6:47 mark, there the lies or omissions begin there. It wasn't the banks, lenders, investors that pushed risky loans, it was the Government created this mess, it was the Community Reinvestment Act created by Jimmy Carter, pushed by Bill Clinton, that started it. It told banks and they MUST give loans to people who didn't qualify
coliwood 1 week ago
@coliwood Political bull! Blame the Gov't for letting private sector create this mess is bull. Too much or too little regulation--the Gov't is to blame is bull. Look at the timing of it all. The housing market didn't start heating up until after the dot.com bust (post-2002)--way after Carter and Clinton. Greenspan said he was wrong to Congress--he, Summers, and Rubin prevented the CTFC from regulating derivatives. A classic, systemic bubble--it popped in our face & ate our lunch!
Dave2170 1 week ago
@Dave2170 Here you dumb fucking idiot: "Fannie Mae Eases Credit To Aid Mortgage Lending" Setempber 30th 1999. The bill was passed by Carter, enacted by Clinton. Hell we are on YOUTUBE their are TONS of video showing the Clinton administration and the Dems pushing it. I just hate when a dumbass, who is too fucking lazy to read or research anything, comes at me with talking points. I don't even know why I showed you the article, it is not like you ignorant ass will read it anyway.
coliwood 1 week ago
@coliwood Thank you for your kind and informative response. Those were not talking points--they are my thoughts, My point is that your opinion is political bull and it doesn't matter that the laws changed or, my point that Greenspan and Summers and Rubin prevent regulation that might have prevented the mess. It is in the past. The posted video is true and well worth watching. Based on your F-ing, I know I made my point. POLITICAL BULL and Insults! LOL
Dave2170 1 week ago
superbly made video, thx a lot! very important to understand!
hromi 1 week ago
moral of the story dont lend money to people who cant pay it back OR barrow money you cant pay back
BlkbeemerE46 1 week ago
masterpiece of explanation
shebotnov 2 weeks ago
Badass video, narration + illustration is gold.
JJbones88 2 weeks ago
is really helps me alot cause am an MBA student and was still thinking how the reccession occurs,beautiful explanation good work!!!
khwaseem1 2 weeks ago
This makes no sense at all to me.
MrMGD92 2 weeks ago
The Federal Reserve system and the government keep rewarding this bad behaviour with bailouts, which is the saddest part of this. The common man still has all his problems while the banks are well taken care of. What a sick society this is.
s0cietysreject 2 weeks ago
101
Kenddrick 2 weeks ago
This was interesting.
Blankname101 2 weeks ago
I think this is a good video, but I think when you get to the part where you say it all goes dark...
You should explain how the liquidation of the debt triggers a market correction.
Right now they are trying to get the old system running again, but everyone knows it will crash and the system is flawed from the get go.
At the end where it says nobody wanted the worthless houses (at least what they were valued at) the government came in and said WE'LL TAKE THOSE PIECES OF CRAP!
this is a bailout.
Dethreid 2 weeks ago
Wow, so its all about WE THE PEOPLE not being responsible. We must all bear the price of bad investments, cheap credit, etc. As much as the Fed is unconstitutional and corrupt from its core, we the people are also responsible for wanting to get on the gravy train and not want to take responsibility. War spending, welfare, its all coming to an end just as the housing bubble. It will be painful but we can get through it. Hopefully we can get Ron Paul into office and at least make it bearable.
madetobegreat 2 weeks ago
JONATHAN Love you dude!
ankuragrawal90 3 weeks ago
SEX BOMB explanation!
ankuragrawal90 3 weeks ago
Comment removed
montyzoma 3 weeks ago
In a National Socialist goverment people will be healthier and live longer due to National Socialist body culture. People will pay tax for longer, spending on old people will go down and so will spending on Hospitals. Banks in NS will control printing of there own money and banks are nationalised. People will learn a good work ethic and not depend on state support. All production at home means jobs and income for people and state. And no country will have power over a nother. NATIONAL SOCIALISM
lolcatish 3 weeks ago
@lolcatish
Ya I heard North Korea was doing great with this idea.
Dethreid 2 weeks ago
@Dethreid Firstly n Korea is communist not Fascist secondly. In a communist state the state builds it and makes people work. In a fascist state, the state builds but then lends out to the people and puts people in charge so there are no tradeunions but the state as a holle is the trade union. sounds like communism but its not. Second i said litle traid, not no trade what so ever. third you can take n korea as an example, i will take all the fascist ww2 countrys where actually workt
lolcatish 2 weeks ago
The only way a country will never go in to a recession is with National Socialism. In NS the country will not depend on trade but agriculture that is done localy this will always create jobs and Nationalised factorys. The state will control the amount of factorys geting built and create jobs and goods. This way not buying from outside and keeping jobs in the country. This is not like communism becuase communism is international that belives in freetrade. This is why Germany in 1940s was great.
lolcatish 3 weeks ago
Great video Jonathan. It all makes sense now thanks.
simonsezwhat1 3 weeks ago
If you want a more in-depth look back at the crisis, read "Fault Lines" By R.G.Rajan
kuzzlenuzzle 3 weeks ago
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The Federal Reserve is a foreign owned private corporation and needs to be thrown out of the USA along with NATO, the UN, the Bilderbergs, the foreign owned Trilateral Commission, the foreign owned Council on Foreign Relations, the foreign spy agency called the Israeli Embassy, along with the foreign president....Obama.
altgeldrarities 3 weeks ago
Thank you for helping me understand how we're in this crisis :)
5LTRETER 3 weeks ago
Excellent Presentation
AppleZfan01 3 weeks ago
Sounds like to me banks over complicate things and capitalize on free money opportunities too well.
solisvictor1991 3 weeks ago
this broke it down really well
djrocko410 3 weeks ago
DEVIL'S SCHEME FOR THE BAD OF POOR PEOPLE lulu.com/spotlight/helenohenzo
THEHELENOHENZO 3 weeks ago
Great video. I always like to think conceptually and this helps with that.
Syblops 3 weeks ago
Great video, very concise and interesting, but it can be made better by explaining more on how CDOs work (which is actually by 'passing on' the loans of homeowners from banks to investors), and mentioning about rising unemployment and inflation which actually led to the initial defaults on payments.
lalaalala1 4 weeks ago
Informative, simple, and should help make bring a lot of people up to speed on how the economy crashed.
keepinlow 4 weeks ago in playlist More videos from dardoush
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Some argue "true capitalism" is needed, or "true socialism" or "true communism". Well, ALL OF THOSE "ISM" ARE THE SAME CRAP! They all rely on the money/debt game. Money has become the greatest "divide and conquer" devise ever imagined. The whole system must be overhauled to a Global Resource Based Economic System as explained by 95 year old Jacque Fresco, creator of The Venus Project. Otherwise we have no hope as a species destroying ourselves and the whole planet with our rampant consumerISM!
VenSucre 1 month ago
This is not the truth, only part of the truth. It worse. The SEC was destroyed, Henry paulson destroyed Lehman bros.. The defaults was caused because of the high interest rate these people have to pay. . These were liar loans. The poorest people had to pay the highest interests. As usual the criminality is forgotten and poor people scapegoated.
This would not have happened if simply the loans were made to credit worthy people at , this is the key, REASONABLE RATES.
johnnybizaro1 1 month ago
A good description of financial crises. It explained each and every possible situation with great pictures and relationship of how of how it worked..!!
justkriti 1 month ago
EXCELLENT explanation. The best I have seen so far. I read about it and my eyes spin. I am math challenged anyway so learning this stuff is well I'd rather jump in quicksand. Very hard for me to understand but I do to a degree. I am going to forward this to people I know do not have a clue. At least I try but many give up and think it's the middle classes fault ... NO WAY...these banking and lending and Wall Street maniacs made out like a king and laugh all the way to their bank ON US!
natalierosen 1 month ago
Excuse me! I am learning Economics @ University too. I find this one really useful because of very well illustration. However, to people in countries where English is not the mother tongue language, it's quite hard to understand this thoroughly. Then, could you please enclose with it the script ?
leothanhhung279 1 month ago
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@AddWib
It is not so much the interest, as the interest on "created" money. Normal production keeps up with the inflation of the money supply from normal interest (primarily because borrowing becomes more expensive if there is less "stuff" to back it). Production cannot keep up with the interest on an enforced fractional reserve fiat currency.
copycat042 1 month ago
well explained..
divya1427om 1 month ago
Awesome video explanation!
goel4ever 1 month ago
If you want to see more how this system works, check out THE ZEITGEIST MOVEMENT on YouTube.
tomsp1138 1 month ago
this is pretty bad..but nothing compared to what happened/is happening with student loans..thats the next credit bubble to burst!
davis68tcnj 1 month ago
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BREAKING NEWS -- Hear me people tell your friends tell everybody the bank will never tell you the truth. NEWS--BANK RUN -TRINIDAD AND TOBAGO WEST INDIES, REPUBLIC BANK, ROYAL BANK, FIRST CITIZEN BANK and SCOTIABANK thousand of customers simultaneously and secretly are withdrawing all their funds, because they believe that the banks might go into bankruptcy, or insolvent and that they the customer will lose all their money.[ Global financial meltdown].
shoeupon67 1 month ago in playlist IMF
all of this are result of human greed.
1241GIBEK 1 month ago
@1241GIBEK well can not change this fact as it is in human's nature but the problem comes from the FED cuz as u see from the vid they lower the intrest % down to 1% and gave money as a credit, if they stop doing this then there would be no problem. You only buy what you can aford, how simple is that. FED should give money only to ppl that want to start a productive business not a finansial institutions.
dimitrovbmw 1 month ago
One question, ....how come people suddenly cant pay their house anymore? is everyone losing their job or what?
stasisnu18 1 month ago 7
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tabishbukhari 3 days ago
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@stasisnu18 I guess because they were keeping houses as a collateral therefore they can sell it to people who are even less responsible(as no credit rating or any other documents were required). Its obvious that they would default at a later time because mortgage is probably a large proportion of their income. A slight fluctuation in income can cause a default. And selling to a lot of people like these is the ignition point.
tabishbukhari 3 days ago
@stasisnu18 The video doesn't state that EVERYONE can't pay their house, just implies that there are always SOME families that suddenly can't pay their mortages. You've forgotten that is the global market, as well as PERSONAL issues, that may cause a family to go through rough financial times.
FumTech 2 days ago
@stasisnu18 scenario: you buy house at 400K. Its now only worth 200K. Your choices : A) pay the mortgage on a 400k house that's worth half that. B) just don't pay it and move on.
that's why there's alot of people just walking away from homes even if they can afford it.
nathansensation5 22 hours ago
@stasisnu18 because they were poor and a lot of them couldnt pay their houses anymore
fernandocchitj 13 hours ago
If I put all my money into a risky stock and the company goes out of business, I lose all my money.
At least assuming the government isn't guaranteeing my money, or that I don't expect a "bailout" or tax payers to buy my "toxic" asset.
The government doesn't subsidize stupid investments by greedy private investors, or subsidize rednecks buying lottery tickets.
Why do we allow them to subsidize large banks and corps centered on extreme risk taking? This punishes the responsible banks & corps
brendanmcwilliams 1 month ago 2
Great video, the only thing I would add to it is how banks bribed rating agencies like S&P to slap AAA on crap CDOs so that private bankers could buy credit default swaps on the mortgages they knew were likely to fail anyway. It's like a bookie tricking everyone else to put their money on the bad team while he goes around and puts all of HIS money on the team he knows is gonna win...
purplexskunk 1 month ago
left out the part where the banks call up the government and get bailed out with our tax money...
anarky4321 1 month ago 2
Good video! You left out the part about Freddie and Fanny guaranteeing the mortgage.
tavhigh 1 month ago
Awesome Video!!! They should play this during Super Bowl Halftime.....
meterotronic 1 month ago
One thing you missed, the government pressured the banks to give out subprime mortgage loans so that poor and minorities would have greater opportunity to get them. What a stupid idea. Don't give money to people who can't afford it. Also the SEC which is run by the gov turned a blind eye when all this was going on. It's all a big scheme. Plus thank Barney Frank and Chris Dodd for a lot of these problems.
jpzxcvbnm 1 month ago
@jpzxcvbnm Not really, banks gave out subprime mortgages willingly, and made billions selling them. Note that in the aftermath of the crisis, the rich got richer while everyone else got poorer.
HamidKarzai 1 month ago
Thank you, very well made!
buyakaa07 1 month ago
post more videoosss i learn more here than in college!!
educainterna 1 month ago 2
Nice one, matches my economic textbooks perfectly, thanx!
likeabouws 1 month ago
"Very well explanation?" Very well "what"? That doesn't make sense, grammatically. Just saying. Nice video though.
palmtreedeprived 1 month ago
complicated financial transaction explained in 11 minutes.
easy to understand and visualize. perfect.
viva from
addis abeba africa
dkassaca 1 month ago 3
great job
liberalus0 1 month ago
super likes.... thank u very much
bhim567 1 month ago
The part you left out was when politicians figured out that they could buy votes by forcing banks to expand the sub prime market and offer mortgages to unqualified home buyers on the basis of race in order to pander for votes. You kind of made it sound like the banks went momentarily crazy and got together to make huge loans to people they absolutely KNEW had no possible way of every paying them back. This crisis is a result of an ignorant, entitled population and a corrupt federal govt.
MisterAsshole2U 1 month ago 11
WoW, that was very refreshing... brilliant explanation
0VideoTest0 1 month ago
So where do the baker bail outs come into play?
carven2004eca 1 month ago
@carven2004eca They come from the federal government first coercing the banks into making these sub-prime loans in the first place so they could fool minority communities into thinking democrats care about the little guy, and then those same politicians realizing that the deal was going to blow up in their faces before they could safely retire, so they figured, "Hell, let's just fleece the so called rich for it...class warfare ALWAYS works, right?"
MisterAsshole2U 1 month ago 7
@MisterAsshole2U
Oh yeah, it had nothing to do with these fucking bankers wanting to line their pockets at whatever risk/potential cost.
fallout2029 3 weeks ago
@MisterAsshole2U 1. No-one forced the banks to make those ludicrously unsafe loans.
2. No-one forced the credit rating agencies to rate them AAA on the assumption that house prices would always go up.
3. The reason the gov't decided to securitise these mortgages was more a symptom of your particular brand of corrupt, real-time democracy than any kind of ideology.
kuzzlenuzzle 3 weeks ago
Cool
Nice one
mrtavi90 1 month ago
Thumbs up : )
junyew93 1 month ago
One thing I wish had been mentioned was that Wall-Street was encouraged to take the risk and create these bombs because the Government, Through Fannie/Freddie, subsidized their loses. So the banks didn't worry about the time bomb as they would be bailed out should the bombs go off.
YaHuWaHservant 1 month ago 3
great work! Did you do this on apple's Motion??
CoradaProductions 1 month ago
remember when America wasn't so greedy and it was a nice little democracy that was proud to be great and independent and everyone was happy .... me neither
shaunikko 1 month ago 67
@shaunikko
How did this have anything to do with greed? The system has brought us the highest standard of living in the world in spite of this.
The majority of sub-prime mortgages were owned by the gov't subsidized (for some uncanny reason) Fanny Mae and Freddie Mac. So much tax payer money was added to these "private" companies that they owned almost exclusively sub-prime mortgages.
With normal capitalism, smart investors don't follow such high risk, and those that do go bankrupt
brendanmcwilliams 1 month ago 2
@shaunikko
Greed is bad, but only stupid people can afford to be greedy. Intelligent investors put there money in either safe or semi-safe investments. Just like on the stock market.
Greedy people in the stock market or hedge funds go bankrupt on a regular basis.
Just like idiots spending their paychecks on lottery tickets. Greed is a trait guarantees poverty.
However, when tax payer money is subsidizing greed (corporate socialism), stupid, risky investments are rife.
brendanmcwilliams 1 month ago 5
@shaunikko Actually, democracy and capitalism do not have a lot to do with each other. Furthermore, greed, when at the mercy of consumers (as it is in capitalism), is a tremendous force for individual happiness.
DomeSwag 1 month ago
@shaunikko i'm sure u got this a million times, but it has to be said. we were never a democracy. we are a republic with democratic principles.
Lasvegasflight99 3 weeks ago
the banks paid the rating agency to give AAA ratings to ALL the mortgages. And leverage is lending money you dont have, in other words, until the homebuyers signed the loan documents, THE MONEY DID NOT EXIST! And this was the plan from the beginng, this didnt just "happen". everybody goes bankrupt?? except for the CEO's of course. But guess who's left holding the bag?? All of us, not wall st, they all got big bonuses this year!!
MrDANNYUNDERWOODky 1 month ago
no one could have explained any easier than this.... simply best.
mkbalu 1 month ago
thats capitalism for ya!
netoboss831 1 month ago
@netoboss831 This has nothing to do with capitalism.
Shudizzle 1 month ago 2
@Shudizzle
True. But be aware that those with billions don't like capitalism. They prefer protectionism.
EeeScape 1 month ago
@Shudizzle it does greeady bastards that want more money
mrbest20 1 month ago
Fantastic video! Simply brilliant!
miketwo345 1 month ago
SOOOOO GOOOD!!!! <3
r078888 1 month ago
What a clusterf%$#. This will ultimately destroy the world economy when Europe goes under.
detached 1 month ago
So in other words, GREED caused all this...
Vikramthewhite 1 month ago
@Vikramthewhite Exactly right.
sandcut1 1 month ago
excelent video
madinkan 1 month ago
unfortinately I still don't understand
Zee96969696 1 month ago
Phaaaa :D sooo in 1 word you guys in the US are SCREWD! :D
zeinfell 1 month ago
@zeinfell What you fail to understand though, is that if the US goes down the entire world goes down.
Yeah it sucks for the rest of the world that their economies will be shattered because the USA can't get its shit together but thats the way it is. There is absolutely nothing to be happy about. No matter where you live, you will be affected.
Sachaztan 1 month ago
First America bombs the middle east and creates a shockwave of massimmigration into Europe, which is in it self an economic crisis, then they fuck up their own economy which is intertwined with the global economy, creating an even bigger economic crisis in Europe. Thank you America! Now we have European Union trying to transform Europe into a new United States and remove the entire democratic system. There's a shitstorm of FUCK coming soon. We're all screwed
DenPilske 1 month ago
This has been flagged as spam show
99% of you will probably not even read this... but i just turned 13 and i am trying my best to become a cow. The 26th of december im traveling to the wide open fields of Texas to hopefully learn from the best cows. Being a cow means alot to me. i've just about started my training. I have nailed old-day irons to my feet (really hurts) and tattooed myself to look like a cow. It would mean the world to me of you supported me
please, it means alot to me! Thanks
macgezzey 1 month ago
what percent of americans do you think know this? i would guess less than 5%
iamjacquesbarjon 2 months ago
Thank you Fannie May and Freddie Mac for pushing housing for people that could not afford a house. If you do a little investigation, the Democrats that ran the operation and said there was no problem is the root cause ( can you say Barney Frank? ).
Channel58 2 months ago 2
@Channel58 Hey, I'm trying to find out more about what you're saying- From this video it seems that it was the greed of the banks who didn't understand they were venturing too close to the edge of danger and kept giving mortgages for the sake of making more $. My suspicion is that it wasn't government that "forced" people to have mortgages as much as this was the excuse banks and government used to "Deregulate" the market and in so doing, made big $ for the Democratic party- am I wrong??
aquarius10780 1 month ago
wow! English is not my main language! & i was reading & reading about the causes of the crisis but never get it!!!
this is a brilliant video!!! it makes everything easy for me to understand!
Thanks a lot.
bedooralhenawi 2 months ago
this was just brilliant
91lilfrozone23 2 months ago
Credit crisis for dummies
littledaemon 2 months ago
If you want a better explanation not that this one was bad you NEED to go watch the movie Inside Job. Its a great movie and gave me the understanding to explain the crisis to my father who is a business consultant making six figures
canadianasian2 2 months ago
Great video, explained well, easy to understand.
ew0054 2 months ago 22
This has been flagged as spam show
ALERT: GOVERNMENT is COUNTERFEITING MONEY for SLAVERY..!!!
ALERT: GOVERNMENT is COUNTERFEITING MONEY for SLAVERY..!!!
CAPITALISM = WORLDS FAKE ECONOMY..!!!
CAPITALISM = WORLDS FAKE ECONOMY..!!!
CAPITALISM = WORLDS FAKE ECONOMY..!!!
CAPITALISM = WORLDS FAKE ECONOMY..!!!
GOVERNMENT+CRIMINALS = DIRTY CAPITALIST SCUM
GOVERNMENT+CRIMINALS = DIRTY CAPITALIST SCUM
HARD WORKING PEACE LOVING HAPPY HONEST SOCIETY were always the slave victim and poorly starve to death. :(
kopellhinex 1 month ago
wow thats amazing how they get our money huh!?
ryangr7gisback 2 months ago
Great video. Love it!!!
frankbridenhagen 2 months ago
This has been flagged as spam show
Ron Paul 2012
09wtff 2 months ago
10:35 SHIT!
BeakyRed 2 months ago
Wish the video would mention how the CRA and Freddie/Fannie assumed the risk of the mortgages as well.
gamingeh 2 months ago
@Willfoster1990 - "Catholic?" No. This is to represent those below the poverty line who reproduce faster than the "responsible" homeowner. This is very endemic in our society. And hinting subtly that many people have more children just to file for extra welfare.
adidams 2 months ago
This is funny!
TheCentralServices 2 months ago
My fave bit was just after 7:13. 'Instead of lending to responsible homeowners, they lend to irresponsible ones'. Then a picture to represent irresponsible homeowners as fat, smoking and (??) catholic.
WillFoster1990 2 months ago
Great video, so easy to get. And still Wall St. doesn't want to be regulated so they keep doing this again, and so many others criticize the protesters and tell them to shut up.. irony is amazing!
melapelantodoss 2 months ago
I tell you what I learn when credit is cheap you create infrastructure to create goods. When hyper inflation happens you then have the infrastructure to sell your products at the high prices and then pay your loans that are on cheap interest. After a cycle you own all that infrastructure and have great credit to earn even more. This my friend is how you ten fold your money in ten years.
labamba8448 2 months ago
I didn't know life could be so interesting. Thanks!
Redflowers9 2 months ago
So how do we fix this and how do we prevent it from happening again?
WhenYouveGoneGuru 2 months ago
@WhenYouveGoneGuru we don't. We are going to need to get rid of the corrupt corp. and dumbass congress, but notmany ppl support ows because they dont fully understand itan ron paul can help us too, but no one listens to his message either. Ron Paul 2012
CodyDylanSewell 2 months ago
so, mr gonzales you work at burger king and make 13,000.00 a year and want to buy a 1,000,000.00 home with no down payment and no credit history. sure thing little buddy. we will just say you really make 13,000,000.00 becasues you are also a day traders on the side. no worries nobody really checks this loan app. oh you dont read english or speak it. no problem i will show you with sign lenguage. see my middle finger it represents me and the fist with my other hand represents your asshole.
churupaca1 2 months ago
so, mr gonzales you work at burger king and make 13,000.00 a year and want to buy a 1,000,000.00 home with no down payment and no credit history. sure thing little buddy. we will just say you really make 13,000,000.00 becasues you are also a day traders on the side. no worries nobody really checks this loan app. oh you dont read english or speak it. no problem i will show you with sign lenguage. see my middle finger it represents me and the fist with my other hand represents you asshole.
churupaca1 2 months ago
Nice!
bornthug213 2 months ago
this is much better than watching the INSIDE JOB.
I understand now about this sh*t
great video.
MrDaniPratomo 2 months ago 3
good to let people know,excellent explanation
corggi1 2 months ago
Thank you, Dardoush.
carapo66 2 months ago
I really like this video, it's clear and easy to understand. Do you mind sharing what app you used to create it?
annes100100 2 months ago
Awesome video. This is how US economy works and this is why we are an such #$&@
MrFromminsk 2 months ago
Awesome video. detailed and easy to understand.
budeidei 2 months ago
Love this, helped with understanding the crisis 3 years after it actually happened!!
CheriiBo0 2 months ago
Part 2: Bailouts
jgonz185 2 months ago
Great video. It really helped in understanding the crisis. Thanks a lot! =]
Mazeon 2 months ago
Human beings are no where near evolved enough for credit.
bnewton81 2 months ago 2
This is basically a summary of "The Big Short". That's a great book. Good video, too.
Jewbacca1212 2 months ago
How sad. These investors make millions by simply moving money around. That's all they're really doing, moving their money around.
2k11bomb 2 months ago 2
This has been flagged as spam show
The ROOT CAUSE of the crash was LAND. Debt after debt was poured into land because it was not taxed. Gains in LAND are tax free. Loans can be secured against LAND as if repossessed the lender pays no tax on the LAND. So much money was poured into land rather than enterprise that it fell over and took all with it.
SOLUTION: Tax the VALUES of all land and its RESOURCES. Not the house (the CAPITAL), the LAND, ALL LAND, even fields. This means no Income Tax. Look up Geoism.
NearAbbeyRoad 2 months ago
somehow the solution is never to remove the 'interest' in the credit system which is proven to somewhat systematically contribute to this global financial crisis. Had the banks foresee this, they would've reconsider taking profit from giving loans or approving mortgages, as a result there won't be anyone buying things they couldn't afford.
AddWib 2 months ago
@AddWib
It is not so much the interest, as the interest on "created" money. Normal production keeps up with the inflation of the money supply from normal interest (primarily because borrowing becomes more expensive if there is less "stuff" to back it). Production cannot keep up with the interest on an enforced fractional reserve fiat currency.
copycat042 1 month ago
This has been flagged as spam show
@AddWib
It is not so much the interest, as the interest on "created" money. Normal production keeps up with the inflation of the money supply from normal interest (primarily because borrowing becomes more expensive if there is less "stuff" to back it). Production cannot keep up with the interest on an enforced fractional reserve fiat currency.
copycat042 1 month ago
Comment removed
AddWib 2 months ago
So I should stop paying my mortgage?
blahtoausername 2 months ago
@blahtoausername depends..might as well write off any unsecured debts and keep the money to buy self sustaining type stuff...the bank prolly doesnt really own ur mortgage as they likely sold it as part of some derivatives package...doesnt mean they wont eventually send armed sheeple by the dozens to get u out of the house if you default, tho
jeffthecoder 2 months ago
The time has come for us all to seek truth and stop tolerating deception and division once and for all. Without the truth, there can be no real morality, justice, equality, unity, success, freedom, love, security, peace, spirituality or even survival. Only the truth can stop the wars and make the world the paradise it can be. Search for "Truth Contest" in Google and click the 1st result, then click on "The Present" to open it. What it says will transform us and our world.
jchijan 2 months ago
Thank you! Easy to follow and makes plenty of sense!!!!
millenniumdragn 2 months ago
Thank you, for explaining this. A much needed video for a high school student who wants to change this.
xaxjx88 2 months ago 2
Very well done!
TradeAwayDotCom 2 months ago
so basically, investing rich mother fuckers need to get the boot up their ass
lifemetall 3 months ago
good job!!
jeaninemichele1 3 months ago
you sir, are brilliant! just the sort of easy-to-understand video on the credit crisis i was looking for
mishalkmh 3 months ago
This has been flagged as spam show
audit the fed dot c o m
streetz23 3 months ago
This circle of greed that's been going on for ages in america can bring the whole global economy to a halt!
sunofegypt 3 months ago
@sunofegypt Not "can bring" it "will bring" the global economy to a halt because of the "money" that everyone wants to get a hand on.
hamoan66boi 3 months ago
I think it was Thatcher and Reagan who authorised the sale of debt.
RobDeManc 3 months ago
Forgot to mention how fiat currency works...
MooseCannon 3 months ago 18
How does this money come from the taxpayers?
bauer18 3 months ago
"Economy goes up, economy goes down, never a miscommunication. You can't explain that."
- Bill O'Reilly
TheLivirus 3 months ago
very good video . thanks
nguyenltmai 3 months ago
boxes lol
harrisonconstantinou 3 months ago
Someone must go to jail for this crisis. Thanks for the video.
403woak 3 months ago 33
@403woak Lets buy a net and go fish brokers on wallstreet, like in twelve monkeys the movie. Would be some fun.
MisterDanger01 3 months ago
@403woak well.. Who? everyone is involved already! i think the only one who should go to jail is "Greed"!
sunofegypt 3 months ago
@403woak When we put someone in jail or prison, the taxpayers pay for their meals and comfort. Jailing is not the solution. All we can hope to do is remove these leeches from positions of power, and watch them struggle to obtain jobs that require skill and proficiancy at something other than speaking to crowds. Economies are ciclical, but that doesn't mean they recover indefinatly. Every Fiat currency in history has failled, the solution to this problem is to get rid of the Federal Reserve.
TumisHumis 2 months ago
@403woak Who, will go to jail ?
Mr Rothschild ?
or
Mr Rockefeller ?
ixthisss 2 months ago
@403woak Jails are for people serving a year or less, while prisons are for people serving more than a year. I'm sure you meant to say prison.
kenshin82789 2 months ago
@403woak Unfortunately you cannot put over 300 million idiots in jail...but don't worry, that can be outsourced to China! Problem solved!
davedavedaveannoy1 2 months ago
@403woak The Occupy Wall Street protestors asked, Why don't the bankers go to jail? President
Obama responded that, while what the bankers did was immoral, it was not illegal. The
bankers will not be jailed since they were given permission to carry out the collapse,
but they will have to answer to the investors who lost money in the collapse of the
home mortgages.
geothermal 2 months ago
Great vid. Well done. Thanks.
Perfect for teaching kids the basics of finance. I'll be looking out for more.
panchopuskas1 3 months ago
And Capitalism was once again subsidized with people's money
I wonder why didn't they do a referendum to see if the population was willing to give away money to banks!
azrodrigues 3 months ago
@azrodrigues
subsidized capitalism is not capitalism, it is corporate socialism. like all socialism, it is unsustainable.
copycat042 1 month ago
@gottimw or you can hold the people accountable in congress who let this happen, and put restrictions on so this does not happen again? so you rather go down with your pride and become homeless? the banks only did this where they had to go to make money... they are entitled to make profits, they are entitled to give money to their shareholders. you REALLY think they'll do this again? cmon now
bauer18 3 months ago
can someone clearly explain a credit-default swap?
bauer18 3 months ago
and how is it legal for banks to use peoples savings and deposit'