they didnt have a utopian view neccesarily but that is just a way to simplyfy their view. what they essentially were doing is dancing while the music was still playing.this was mentioned in john cassidy's book "how markets fail, the logic of economic calamitites" check it out its a great read and loads of insight on utopian and real economics
he said he got a 30 year fix home loans in his day and the bank said will he have a job for the next 30 year to make his payment what a joke $10,000 is a deep hole
Does anyone think the Community Reinvestment Act had anything to do with this in the first place? The government forced banks to give loans to people that could not afford them. Therefore it was not hard to predict that the majority of mortgages would default. Investors took advantage of this knowledge and exploited it. Anyone?
@joae1975 It was more like this, and I know from experience. Fannie Mae and Freddy Mac would buy almost any mortgage from a bank, that is if the person taking out the loan was still breathing. In this way the banks went by the rules, but they pushed it. They gave out as many loans as possible, then dumped them off on the GSE's. The banks were out to take advantage of the GSE's buying up the mortgages; a natural thing to do. Then Wall Street got involved.
@jbranstetter04 Ding ding ding. I think it was about half of all sub prime mortgages in the US were backed by Fannie and Freddie. The other half ended up insured by AIG and/or fraudulently labeled AAA and sold to pension funds and hedge funds.
@joae1975 I love how right wing libertarian types constantly claim that the government "forced" banks to give out mortgages to people who couldn't afford them. They provided incentives to encourage it, but they became less effective over time. The real reason for the mortgage orgy was the structure of the MBS market, and the fraud that ultimately left unsuspecting hedge funds, GSE's and pension funds with millions of AAA rated sub prime mortgage backed securities.
@joae1975 Yes, it certainly did not help. BUT, the majority of the banks who were playing risky had nothing to do with the CRA. But as for banks that were affected by this law, they should make FIXED INTEREST RATE payments only. When Bernanke raised the interest rate form 1% to 5%, all these loans blown up, but they would be fine if it was a fixed contract. Sorry for my bad english bro, i'm french XD
A 2007 Wall Street Journal study showed hat in 2005, the peak of the sub-prime boom, borrowers with good credit scores got 55% of all sub-prime mortgages. Coincidentally, the banker's commission on sub prime loans was multiple times higher than regular loans.
@Holowachuk I think people would understand better if you said that the olive crop failed and he lost all of his wealth because he was stuck with olive squeezers that no one wanted, and no cash. It's like he cornered the market on the squeezers, but there ended up being no market for them. But would it not be more accurate to say that someone was betting that he would fail, and that is a derivative of the kind we are speaking of?
The current crisis is not merely a failure of the US housing bubble, that is but a symptom of a much wider and far-reaching problem. The nations of the world are mired in exorbitant debt loads, as the sovereign debt crisis spreads across the globe, entire economies will crumble, and currencies will collapse while the banks consolidate and grow. The result will be to properly implement and construct the apparatus of a global government structure.
@Evry1LuvsJennieO first they repealed glass-steagall and got in Gramm–Leach–Bliley Act which meant insurance and banking corps can merge, then they signed Commodity Futures Modernization Act of 2000 which says you cant regulate derivative and risky financial instruments.
It's not illegal because deregulation made it not illegal. That's the problem with lax regulation on Wall Street. Banks used to be obliged to invest no more than 10 times the amount of cash they're holding. That's 10/1. Today, some banks are undercapitalized by 40/1. This is what AIG was doing with bogus loans. It's easy to collect premiums when you know you'll never be able to pay anything out.
well unfortunately the human race puts so much focus on money that it's no wonder greed overtakes. Betting at a casino is one thing. Fine. But this type of behaviour in the finance markets is purely evil. People lost not just money but also; their homes, themselves and in some very sad cases their lives. Banks say sorry but no amount of apologies makes up for the people who have lost everything and committed suicide as the only option out. Bankers = Evil and they will rot in hell.
@airman310 You had better start warming up to hosts screaming yelling and cutting off their interviewees ala FOX, because NPR has been attacked by the almighty James O'keefe
fantastic clip. helps with the understanding of the whole scam. and a scam it is/was. but i wonder why no news reporters have gone and dug deeper in finding the figures and facts and the beneficiaries of the synthetic assets and their winning bets?
As usual, govt. good intentions (this was started by Clinton) have a greater disadvantage than any good. Like genetic engineering, dont mess with the natural free market system (banks protecting themselves from loss). Now President Obama is trying to do good by substituting oil and gas with ethanol, solar panels and windmills. Clearly the disadvantages will outweigh any advantages.
Only problem here is that this guy says housing prices dropped. He didn't mention that the real reason for foreclosure was that interest rates went through the roof.
Now , i wonder who controls those interest rates , wouldn't be the lenders and/or derivative holders , would it? Sounds like the mafia is in control of the financial system.
I would like to know why a guy betting on housing mortgages with an agreement on his bet secured by an insurance co and his bookie goes "bk", why does the bettor get paid by tax payers who had nothing to do with the agreement between a bettor and a bookie and a backer.
Derivative= A fu%$in bet. This guy makes it pretty clear : "I bet this guy will successfully pay off his 30 year mortgage". I believe the crux of the problem is NOT the derivatives or reckless lending or any of that sh%$. This crash has one cause and one cause only: JOBS. Western Civilizations absolute failure to grow the economy...We did pretty good during the 90s with the dot com revolution, but ingenuity dried up.
"you obviously don't know what a bubble is"-smokeyandcraig
Well well well. Check out the big fu%$in brain on Smokey here, everybody. Listen professor, the guys up top have one job and one job only: Growing our fu%$in economy. Period. They get rewarded big time for that (ie:lear jets, Lambos, house in the Keyes,smokin hot hoes, etc). They end up fu%$in up? String ´em up and hang ´em high I sez.
@RideMyBMW economy can't grow endlessly, stop being a jackass. ya unemployment is a problem but that is also partly due to the derivative and subprime loans which are costing the american people billions to repay. so ya, some job growth would have helped but there is no way that job growth would have prevented this bubble from bursting. im assuming you think that a ponzi scheme can last forever?...thanks professor.
@RideMyBMW More to it than that. Although you comment is an important part.
Look at past recessions and energy and you will find an oil price spike associated with the worst, including this one. Oil running from a dip of around $10 a barrel in 98 to over $147 in 2008 resulted in gas over $4. Many people bought gas to get to work so they could eat and get to work... Did not pay their mortgage. X 100 million people, for years and the bottom of the pyramid is drained of its capital - CRUNCH!
@Knossos22 Essentially we are watching the failure of capitalism as net energy per capita declines. But the technology Sigmoid curve cannot be ignored either. 300 million Chinese and a bunch of wall mart stores (et al) have made it impossible for millions of small businesses in the US to exist any more.
Insanity is doing the same thing over and over expecting a different response. The US is certifiable.
@Knossos22 Not a failure in capitalism just a giant Ponzi scheme caused by the government trying to enforce social policy by doing away with regulations on what the purchaser had to put down and what they could afford. All this to allow poor people to get into a home at no cost. Whenever the government gives people a chance to get something for free this happens.
@Knossos22 It is not a line of crap. I know from personal experience people who received mortgages with not much more than a credit check. And the reason for that laxity was the politicians desire for more home ownership, which includes the politician called Bush. With that said, the video has almost nothing to do with that aspect of our current and former problems. What is needed is not necessarily more regulation, but better and different regulation. The fear is that democrats go to far.
I agree with almost all of this. The last line is a generalization that fails in several ways. A study of the histories of the 51-50 votes in the senate shows who produced the massive federal deficits and who was able to balance the budget (granted with some gimmickry)
I think where we part company (maybe not???) is I believe focus here is too narrow. It does not fully explain what has happened. I do not believe it is the primary cause. Just blaming the poor.
@Knossos22 My only failure was that the period after "far" was the 500th character and I didn't want to make another comment. A knowledgeable person knows that the democrats are more prone to regulating than republicans, and that over regulation can drive business out of the country. So a balance is needed; not too much regulation, but enough to stop over speculation and "excessive" Wall Street "gambling". I would never blame a poor person for taking a good deal on a mortgage.
So basically these "insurance" derivatives on the horrid mortgage loans was essentially equal to betting millions of dollars on the Detroit Lions winning the Super Bowl in 2008. The chances of you winning would be less than 1%.
@hockeyman9613 It is deeper than that, what about betting against people who is betting for the team that has michael jordan in, then buying michael jordan in the middle of the season and putting him in whatever team you are betting for, then betting against michael jordan fans, then buying Jordan off again...?
And these professor didn't even mentioned that AIG's derivatives is 4 trillion, but the total derivatives in all companies is more than 60 trillions.
I knew it in 2007 this would happen! - I knew it! - These people at Goldman Sachs are geniuses, in bad way of course, but you must hand it over to them...
this whole instrument was designed by them, to get the congress to allow a deregulation of loans insurance in sub-prime market, is genius.
Simply the money went form main stream to wall street. This is how you make over 600 billion.
Greatest genius of all is Mr. Warren E. Buffett, he actually made people believe that he is a moral investor
@joshua8400 The ones who came out with this scam were Republicans,
watch----> "Enron: The Smartest Guys in the Room" watch?v=o5clNtt7P and they did not stopped with Enron, they did the same thing in many companies all the way to 2008 when the government had to step in and save AIG
I haven't seen anyone else trying to correct it in office since. Look past your Republican and Democrat parties because they are all members of the Greed Party.
Thank you for explaining this to laypeople! For everyone interested I can recommend Gillian Tett's "Fools Gold" - she's Capital Market Editor for the FT and has accompanied JPMorgan from 2005-2007 and explains in full detail what happened.
There is a deliberate attempt to hide information like this from the general public. I came across this clip because I'm studying finance and wanted to know more about derivatives.
I would never have seen this on mainstream TV though. Also it's too complicated. I'm sorry but there are stupid people out there (ie. people who think Colbert is actually conservative and his presidential run was actually serious).
basically, ex goldman sachs ceo, hank paulson, sheperds through the crime of teh century- TARP. the uneducated citizen thinks AIG got the cash, but goldman sachs, made out like bandits. total genius evil crime. and it ain't over yet
Great video. Good way to describe the Wall Street ANIMAL FARM. I hope these thieves will one day pay for all the misery they've caused due to their uncontrollable hunger for greed. They get the last laugh knowing how well they scammed poor people.
154-206- what he's refering to is that banks created Mortgage-backed securities and sold the loans to sell the 3rd parties
206-bundled into a basket- means the banks breaking up the loans into small securities and selling them to investment banks such as Lehman, which then sell these to their clients
247- synthetic securitization doesn't involve actual ownership, its just a bet on a situation. for example, you can make a synthetic security which bets if the US dollar will crash.
@RobertW1809 The technical term for "bundling loans into a basket" and dividing the basket into small bits is creating Collateralized Debt Obligations (CDOs). The point of doing that is that it spreads the risk on many loans, making the CDO a practically risk-free investment (in theory). That's why the banks were able to make all these crazy risky loans and then sell them as AAA rated investments, conning pensions funds into buying for $trillions worth of junk CDOs which became worthless in 2008
Heh - low view count indeed.. You know whats even funnier? Derivatives in wallstreet are deliberately difficult for the 'average' American to figure out. Which immediately renders the majority as disposable slaves to the system. Only the very few highly competent mathematicians can truly see through the derivatives.. sadly most of them work in wallstreet :P
@jsamsonite07 - all derivatives should be erased. they're all synthetic anyway! what a scam. i can't belive congress went for TARP. thats how uneducated they are.
I'm hoping to find some hard data on the overall size of the derivative market world wide, do you have anything substantial you could direct me to that backs up your $1.5 quad. number?
Thanks.
P.S. I remember coming across data showing how much a certain bank held, it seams like it was GS for $800 B, but I'm not sure.
@jsamsonite07 No what the people should have done is understand our money system. We should have stuck with gold and silver and left money creation to the other nations. We borrowed to much fake money from the banks which gave them this power in the first place.
Example: How can a bank lend out gold when it doesnt have any?
but they can loan out ten times more than they have in reserves since money is not backed by gold. they can create money.
@AroundSun Most people are swayed by the mainstream media. With regard to the economic collapse: there were people who were warning us, but the media jumped on the bandwagon once it became too late. We need to fundamentally change the way news and information are spread in our country.
If they're un-regulated, why bother paying them back? If they're fiat bets, based on nothing, if they're not paid back, nothing would happen (minus confidence). Strange indeed. All sounds like a set-up. However, going further, I don't blame the bankers, I would too, if I were forced to give loans to people that were not capable of paying them. Gotta love leftist politics!
What happened was like in that movie, where the bad guy is surrounded by the law enforcement, who wants him to tell them how to defuse the bomb. With no chance of escaping the bad guy puts his gone to his head and says: "Drop your weapons, or I'll shoot!" That's what Goldman Sachs did, and the foolish people in Washington gave in, when they should have let them fail.
@mbdulka The 'bet' goes into their assets sheet. If a companies assets are less than their liabilities then they are insolvent. They paid them because they didn't want them to crash along with other institutions. Not saying I approve that's just the reason, probably.
@LuqmanNaq Yeah, I understand that ... but since this is an unregulated market, AIG (in this case), should have just refused to pay ;-) (I guess unregulated doesn't mean illegal). Whatever the case, this should all be regulated and/or completely deregulated and banks should have been saved. I prefer the latter option. ;-)
The productive nation-state economies of the world have been undermined and destroyed by the parasitical structures of Financial Oligarchism. This Oligarchy is making a "world-wide grab" for raw materials and food supplies.
I just can't figure out for the life of me why these crooks are not in jail. What is going on here??? Why aren't the right questions asked to the thieves of the corporate world? A person who works his/her ass off to create a life of wealth and prosperity ends up paying for some big hot shot bankers casino bet on a low income mortgage????? HOW DOES SHIT LIKE THIS JUST SLIDE BY?!?! These people are an absolute embarassmennt to our country, the world, and the entire human race.
trust me im the last person to wanna fight and condone violence, but short of armed revolution, do you really see these bankers or the politicians who allowed them to do what they did, ever getting their just desserts?
As far as i know - the first forms of derivatives were invented to secure things like the stable prices of the crops and harvests and they have been really helpful for the business. But when there are so many players in the game, including insurance companies who haven put aside nothing for back up, and one can bet on anything..it's pretty easy to turn this whole financial instruments into a casino. But even in the casions thay have some rules - they at least make sure that you don't win :)
Did you even listen to what Mr. Greenberger is saying? Three times the money was lost, not because people couldn't afford their mortgages, but because of the UNREGULATED bets made by financial institutions, that people couldn't pay their mortgages! 3X! So it's not "both", it's mostly a lack of regulation of OTC derivatives. Don't fall for the tea party blather.
"For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath." Mark 4:25 KJV
It's Biblical law, who is the hath? who is the hath not? in America and the World, it's better to be rich. trust me, it's easier to figure out how to build wealth for yourself and your family than it is to fix the problems with the economy of America. Understand the Federal Reserve controls the money, I would like to know who controls this private organization?
Incredibly naive explanation of derivatives, one sided and completely lacking in substance. I can't believe he is a prof., risks are usually hedged to within a small percentile range. The actions of one mismanaged company should not be used to explain the entire industry. Imagine we did that with everything, America would be filled with GW Bush's! Think about it...and do your own research.
Well this is a very clear explanation on that one side of derivatives. Who knows what other derivatives are going to blow up for someone in the future. That said derivatives can be used to improve the economy but they can also be abused. Just like many other things in life such as cars, guns and knives, they are all useful but can also be dangerous.
Thanks for the post! Derivatives take time for strategic planning, right? Those involved take their spot and align themselves with the ruse. Well, what is bothersome to me is the one minute investigations these guys have to face. Ok, so I didn't pay attention to these political communities cos I saw them as liars but now I've got my pliars. I'm opening up my mind and I'm questioning that which I didn't know. Otherwise, these guys will ask for more matches to add to their fuels of ill gain!
What logic is that? If you're trying to get skinny, do you decide eat more anyway? If we're willing to let big companies fail, who do you think pays for that? The American taxpayer. But what the hell, who are? We're just a bunch of smucks who let them do it and don't do shit about.
The shareholders pay for failure of a company. When a company goes bankrupt, generally shareholders are wiped out. It's only Bush/Obamanomics that require we the taxpayers bail out these companies.
cringo123, why dont u go get a job and start contributing to society and the economy. People like u are even worse, u plainly suckle at the teet of us tax payers, and do nothing but squeeze a sh!t out in return. Break yo self
complaining about derivatives is missing the point. Wall street caters to greed in the first place. Capitalism is a flawed economic system, period. Socialism, Capitalism, Communism are all MONETARY systems, the only difference in ANY of them is the amount of regulation by the govt.
Support a resource based system. It's scientifically sound, and ALL will benefit.
I read somewhere that the derivatives black hole is like $25 trillion. The tarp program has allotted $24 trillion.....hmmm. I wonder if there is a connection?
Where was the Fed? SEC? Rating agencies? FBI? There was not a single CPA / MBA that could glean the potential risk?? And we are supposed to believe this was all an accident??!! The supposition that this was an accident is a bit toooo far fetched.. Ron Paul, Peter Schiff, Jim Willie, Jim Puplava, Gerald Celente and Max Keiser did understand this was a scam.. Where's the prosecution effort?? White collar crime rules!!!!!!
yeah the economical value is that the rich get richer quicker and the poor give all they have to them and then can go and die, while the rich use everything
i agree....i cpuld post an entire video archive describing t hese events and each will have a total combined viewing of 1000! It's really kinda sad. Wheres the education? And can you really blame those wh profit from understanding finance when all the masses want to do is visit the next hot club and drown their sorrows in alcohal?
288 views - America where are you!!!! Your government and your financial system is pulling the guts out of your country and all you can do is bush another burger down your throat - wake up - send this video to all your mates - this is IMPORTANT - Here in little old New Zealand we are more clued up about your economy than you are!!!
288 views, and that's out of over 300 million people, which is counting babies too. I think they are watching wrestling or American Idle. I just happened to turn on C-SPAN, and this was on, so I pushed the record button. I thought he did a very good job of explaining part of what went wrong, and part of how we can prevent it in the future.
@chrisivy747 They're paying attention, but to what? Not this or the stuff that will teach them something useful as far as being a responsible voter etc. And I'm not saying to vote for a democrat or a republican, you can vote for either one, but at least get involved and get the right ones to run for office; the ones who are not in it for their own selfish interest.
@miramfm: what he says is mostly oversimplified. Derivatives are very useful financial instruments if they're handled well. Swap contracts facilitate many transactions and open up the door for profit. More regulation is needed however. The core problem is that regulators have no idea how these instruments work, what they mean in entirety, and they never get the big picture.
Swap contracts market is estimated at a little over 232 trillion USD. Why dismantle this industry?
@miramfm Your largest city, Auckland, also engages in swap contracts in trying to hedge against currency exchange risks when it comes to investments and interest rates on the loans they take out.
He asked what the "economic value" of a CDS is. It's the same as short selling. It provides liquidity to the market and more accurately prices the assets in question.
One quadrillion dollars is the sum of outstanding fake derivatives
It's a criminal organization that caused 3 depressions in the 30's (google their retraction of money and the correlating collapse of biz & unemployment)
Then, the FEDs same shareholders bought up property and companies at pennies on a dollar!
The FED wants the USA to collapse! The FED is NOT part of the US Government!
Look up, "Money as Debt" on YT posted by compelled2283. This explains to the tea how the banks have worked. Scary stuff. The video is really the animated work of Paul Grigon. The whole video lasts 47 minutes. Therefore you will have to find several parts. Wilson should have never allowed the Federal Reserve to ex ist. This is a scam & the elite are getting away with it. These banks make the mafia look like saints.We are slaves to the banks.Our slave taxes keep them safe & we lose everything.
Now you know why Rockefeller is trying to shut down the internet via Senate Bills 773 & 778, (I have the video of Rockefeller convincing Congress to shut it down)!
Just download it via Internet page downloader, (do you have an Internet download manager? Just google to download one; or the Firefox page has several downloader add ons you can use)
AIG only insured "Super-senior" tranches that were never supposed to default and did not default according to AIG and the Office of Thrift Supervision, the "regulator" for AIG.
The bailout money for AIG went for "collateral calls" in the CDS contracts due to rating downgrades since the insured MBSs were downgraded by Mark-to-Market accounting as well as AIG's own AAA rating downgrades.
When the AAA-ratd US govt. took over AIG. that should have ended ratings downgrades payments but it didn't.
The federal government deserves part of the blame but so does "Liberty and the Free Market".
Without "Liberty and the Free Market", we don't have the Credit Derivative Bubble and the Wall Street Securitization Bubble (the second Securitization Bubble besides the GSEs) that magnified the problem to depression level.
Every political faction's favorite scapegoat is to blame as well as every political faction's sacred cow is to blame.
Paulson, former CEO of Goldman Sachs & Treasury Sec under Bush, is involved in Bear Stears & Lehman Brothers & with Geithner (also of Goldman Sachs) & the privately owned FED Res Bank & other banking oligarchs.
These oligarchs torpedoed pensions to create the new peasant class of indentured servants without medical, retirement or savings, (with the FED tripling money supply in 6 mos inflation is astronomical & wiping out savings)
Credit Derivatives were integral in the Securitization Bubble on Wall Street that fueled the housing bubble in its latter stages.
Credit Derivatives also created the Credit Freeze panic after the Lehman collapse by significantly contributing to counterparty solvency lack of confidence.
Was it Fannie and Freddie? Yes.
Dems in Congress and their "affordable housing".mandates on the GSEs fueled the origins and latter stages of the Housing Bubble.
European & American state aid is interlocked into the International Bank of Settlements, which is tied to World Bank, which is tied into the IMF, which is like all things: Tied into Goldman Sachs!
Why don't sheeple want to be independent of Goldman Sachs & JP Morgan?
Instead their lives are dictated to by a bunch of arbitrage wielding sycophants & sociopathic criminals who profit by destroying the system!
I know. I know: Financial Derivatives is a JOKE!
syk4ryo 1 week ago
Alan Greenspan and his band of deregulating demons are respsonsible for this mess. Greenspan was in for way too long and had too much power........
everyone had too much belief and confidence in him.
hotwelder2010 1 month ago
they didnt have a utopian view neccesarily but that is just a way to simplyfy their view. what they essentially were doing is dancing while the music was still playing.this was mentioned in john cassidy's book "how markets fail, the logic of economic calamitites" check it out its a great read and loads of insight on utopian and real economics
Juands10 1 month ago
make payments for 30 or 40 years what a joke. that why in 2006 18% of the loans
miss the the first payment . 18% of the home loans we gave out cant make the
first payment i wonder why
sha370z 3 months ago
people took out home loans on dead people
sha370z 3 months ago
he said he got a 30 year fix home loans in his day and the bank said will he have a job for the next 30 year to make his payment what a joke $10,000 is a deep hole
sha370z 3 months ago
Excellent breakdown. This guy is awesome
dionusos2 3 months ago
Does anyone think the Community Reinvestment Act had anything to do with this in the first place? The government forced banks to give loans to people that could not afford them. Therefore it was not hard to predict that the majority of mortgages would default. Investors took advantage of this knowledge and exploited it. Anyone?
joae1975 3 months ago
@joae1975 It was more like this, and I know from experience. Fannie Mae and Freddy Mac would buy almost any mortgage from a bank, that is if the person taking out the loan was still breathing. In this way the banks went by the rules, but they pushed it. They gave out as many loans as possible, then dumped them off on the GSE's. The banks were out to take advantage of the GSE's buying up the mortgages; a natural thing to do. Then Wall Street got involved.
jbranstetter04 3 months ago
@jbranstetter04 Ding ding ding. I think it was about half of all sub prime mortgages in the US were backed by Fannie and Freddie. The other half ended up insured by AIG and/or fraudulently labeled AAA and sold to pension funds and hedge funds.
ScottBrown666 2 months ago
@joae1975
glawrence9 2 months ago
@joae1975 I love how right wing libertarian types constantly claim that the government "forced" banks to give out mortgages to people who couldn't afford them. They provided incentives to encourage it, but they became less effective over time. The real reason for the mortgage orgy was the structure of the MBS market, and the fraud that ultimately left unsuspecting hedge funds, GSE's and pension funds with millions of AAA rated sub prime mortgage backed securities.
ScottBrown666 2 months ago
@joae1975 Yes, it certainly did not help. BUT, the majority of the banks who were playing risky had nothing to do with the CRA. But as for banks that were affected by this law, they should make FIXED INTEREST RATE payments only. When Bernanke raised the interest rate form 1% to 5%, all these loans blown up, but they would be fine if it was a fixed contract. Sorry for my bad english bro, i'm french XD
BonesRemix 1 month ago
@joae1975
A 2007 Wall Street Journal study showed hat in 2005, the peak of the sub-prime boom, borrowers with good credit scores got 55% of all sub-prime mortgages. Coincidentally, the banker's commission on sub prime loans was multiple times higher than regular loans.
taeonu 2 weeks ago
@joae1975
Search: "Subprime Debacle Traps Even Very Credit-Worthy" for full article on Wall Street Journal Online
taeonu 2 weeks ago
Comment removed
coachpharmacistjoe 3 months ago
derivatives means speculating about the price in the future.
it's simple. aristoteles bought any olive squeezer he could find and when the harvest came every farmer had to hire to squeezers from him.
if someone else had constructed more squeezers in the mean time he would have failed.
clear?
Holowachuk 4 months ago
@Holowachuk I think people would understand better if you said that the olive crop failed and he lost all of his wealth because he was stuck with olive squeezers that no one wanted, and no cash. It's like he cornered the market on the squeezers, but there ended up being no market for them. But would it not be more accurate to say that someone was betting that he would fail, and that is a derivative of the kind we are speaking of?
jbranstetter04 4 months ago 3
The current crisis is not merely a failure of the US housing bubble, that is but a symptom of a much wider and far-reaching problem. The nations of the world are mired in exorbitant debt loads, as the sovereign debt crisis spreads across the globe, entire economies will crumble, and currencies will collapse while the banks consolidate and grow. The result will be to properly implement and construct the apparatus of a global government structure.
sudan15 5 months ago
Someone explain these two questions to me...One, how is this not illegal? Two why aren't these scumbags in federal prison?
Evry1LuvsJennieO 5 months ago 3
@Evry1LuvsJennieO Over 30% of federal prisoners are illegal aliens. There is no room. How can we fix this?
jbranstetter04 5 months ago
@jbranstetter04 Something tells me that's not true...
ScottBrown666 2 months ago
@Evry1LuvsJennieO first they repealed glass-steagall and got in Gramm–Leach–Bliley Act which meant insurance and banking corps can merge, then they signed Commodity Futures Modernization Act of 2000 which says you cant regulate derivative and risky financial instruments.
MrBigEnchilada 4 months ago
@Evry1LuvsJennieO glass steagull removed by bill clinton-ista
glawrence9 2 months ago
@Evry1LuvsJennieO
It's not illegal because deregulation made it not illegal. That's the problem with lax regulation on Wall Street. Banks used to be obliged to invest no more than 10 times the amount of cash they're holding. That's 10/1. Today, some banks are undercapitalized by 40/1. This is what AIG was doing with bogus loans. It's easy to collect premiums when you know you'll never be able to pay anything out.
dookdawg214 2 months ago
well unfortunately the human race puts so much focus on money that it's no wonder greed overtakes. Betting at a casino is one thing. Fine. But this type of behaviour in the finance markets is purely evil. People lost not just money but also; their homes, themselves and in some very sad cases their lives. Banks say sorry but no amount of apologies makes up for the people who have lost everything and committed suicide as the only option out. Bankers = Evil and they will rot in hell.
jimjimthehumanbin 5 months ago
two words sums up wall street banks finance regulators and politicans they are all fucking bastards
graham640 6 months ago
This guy should run this country.
boxerguy1982 7 months ago
it is sad but learn everything on derivatives and make money while u can, we live in a cold world where greed is god almighty.
kdrogba 7 months ago
@kdrogba very true all evil bastards
graham640 6 months ago
Capitalism wins again
UberTroll13 9 months ago
so Wall Street is a casino?
FortNikitaBullion 9 months ago 14
@FortNikitaBullion Apparently.
sketchables 2 weeks ago
@airman310 You had better start warming up to hosts screaming yelling and cutting off their interviewees ala FOX, because NPR has been attacked by the almighty James O'keefe
loveofphysics 10 months ago
I just saw Inside Job and this 10 minute Youtube clip made more sense to me than that 2 hr, Academy Award winning film.
KidGloves2112 10 months ago
fantastic clip. helps with the understanding of the whole scam. and a scam it is/was. but i wonder why no news reporters have gone and dug deeper in finding the figures and facts and the beneficiaries of the synthetic assets and their winning bets?
and the sheepple are still asleep.
bigbrother1994 11 months ago
As usual, govt. good intentions (this was started by Clinton) have a greater disadvantage than any good. Like genetic engineering, dont mess with the natural free market system (banks protecting themselves from loss). Now President Obama is trying to do good by substituting oil and gas with ethanol, solar panels and windmills. Clearly the disadvantages will outweigh any advantages.
limppimento55 11 months ago
Only problem here is that this guy says housing prices dropped. He didn't mention that the real reason for foreclosure was that interest rates went through the roof.
Now , i wonder who controls those interest rates , wouldn't be the lenders and/or derivative holders , would it? Sounds like the mafia is in control of the financial system.
dynotuner 11 months ago
I would like to know why a guy betting on housing mortgages with an agreement on his bet secured by an insurance co and his bookie goes "bk", why does the bettor get paid by tax payers who had nothing to do with the agreement between a bettor and a bookie and a backer.
IExposeMormonism 11 months ago
Derivatives are a smokescreen for money creation.
a10fjet 1 year ago
This was covered nicely in Wall Street 2.0
Knossos22 1 year ago
this video is the best explanation of derivatives i've ever seen. awesome video.
smokeyandcraig 1 year ago
I came here from a World of Warcraft forums post. Thumbs up.
Pporcheddu 1 year ago
Derivative= A fu%$in bet. This guy makes it pretty clear : "I bet this guy will successfully pay off his 30 year mortgage". I believe the crux of the problem is NOT the derivatives or reckless lending or any of that sh%$. This crash has one cause and one cause only: JOBS. Western Civilizations absolute failure to grow the economy...We did pretty good during the 90s with the dot com revolution, but ingenuity dried up.
RideMyBMW 1 year ago
@RideMyBMW you obviously don't know what a bubble is. growth is not endless no matter what youdo.
smokeyandcraig 1 year ago
"you obviously don't know what a bubble is"-smokeyandcraig
Well well well. Check out the big fu%$in brain on Smokey here, everybody. Listen professor, the guys up top have one job and one job only: Growing our fu%$in economy. Period. They get rewarded big time for that (ie:lear jets, Lambos, house in the Keyes,smokin hot hoes, etc). They end up fu%$in up? String ´em up and hang ´em high I sez.
RideMyBMW 1 year ago
@RideMyBMW economy can't grow endlessly, stop being a jackass. ya unemployment is a problem but that is also partly due to the derivative and subprime loans which are costing the american people billions to repay. so ya, some job growth would have helped but there is no way that job growth would have prevented this bubble from bursting. im assuming you think that a ponzi scheme can last forever?...thanks professor.
smokeyandcraig 1 year ago
@RideMyBMW More to it than that. Although you comment is an important part.
Look at past recessions and energy and you will find an oil price spike associated with the worst, including this one. Oil running from a dip of around $10 a barrel in 98 to over $147 in 2008 resulted in gas over $4. Many people bought gas to get to work so they could eat and get to work... Did not pay their mortgage. X 100 million people, for years and the bottom of the pyramid is drained of its capital - CRUNCH!
Knossos22 1 year ago
@Knossos22 Essentially we are watching the failure of capitalism as net energy per capita declines. But the technology Sigmoid curve cannot be ignored either. 300 million Chinese and a bunch of wall mart stores (et al) have made it impossible for millions of small businesses in the US to exist any more.
Insanity is doing the same thing over and over expecting a different response. The US is certifiable.
Knossos22 1 year ago
Derivative is Fake.
heartlessvietboy 1 year ago
@Knossos22 Not a failure in capitalism just a giant Ponzi scheme caused by the government trying to enforce social policy by doing away with regulations on what the purchaser had to put down and what they could afford. All this to allow poor people to get into a home at no cost. Whenever the government gives people a chance to get something for free this happens.
casper1918 11 months ago
@casper1918
Ha ha ha ha ha ha ha ha ha...
Who are you repeating with that line of crap?
Or are you going to claim you made that one up all by your little self?
100% pure crap!
Knossos22 11 months ago
@Knossos22 It is not a line of crap. I know from personal experience people who received mortgages with not much more than a credit check. And the reason for that laxity was the politicians desire for more home ownership, which includes the politician called Bush. With that said, the video has almost nothing to do with that aspect of our current and former problems. What is needed is not necessarily more regulation, but better and different regulation. The fear is that democrats go to far.
jbranstetter04 11 months ago
@jbranstetter04
I agree with almost all of this. The last line is a generalization that fails in several ways. A study of the histories of the 51-50 votes in the senate shows who produced the massive federal deficits and who was able to balance the budget (granted with some gimmickry)
I think where we part company (maybe not???) is I believe focus here is too narrow. It does not fully explain what has happened. I do not believe it is the primary cause. Just blaming the poor.
Knossos22 11 months ago
@Knossos22 My only failure was that the period after "far" was the 500th character and I didn't want to make another comment. A knowledgeable person knows that the democrats are more prone to regulating than republicans, and that over regulation can drive business out of the country. So a balance is needed; not too much regulation, but enough to stop over speculation and "excessive" Wall Street "gambling". I would never blame a poor person for taking a good deal on a mortgage.
jbranstetter04 11 months ago
WHAT AN OUTRAGE. WE'VE BEEN HAD! all because of deregulation? it was outlawed before? OUTRAGE.
LucentTwinkle 1 year ago
I've heard they don't pay! :S At this moment I'm using the method posted at ez-casino(dot)com, it works fine, making extra $40 a day with it! :D
kathiAcevedovimi 1 year ago
So basically these "insurance" derivatives on the horrid mortgage loans was essentially equal to betting millions of dollars on the Detroit Lions winning the Super Bowl in 2008. The chances of you winning would be less than 1%.
hockeyman9613 1 year ago
@hockeyman9613 It is deeper than that, what about betting against people who is betting for the team that has michael jordan in, then buying michael jordan in the middle of the season and putting him in whatever team you are betting for, then betting against michael jordan fans, then buying Jordan off again...?
And these professor didn't even mentioned that AIG's derivatives is 4 trillion, but the total derivatives in all companies is more than 60 trillions.
affiliate30 1 year ago
The Big boys NEVER lose!
Pfsif 1 year ago
I knew it in 2007 this would happen! - I knew it! - These people at Goldman Sachs are geniuses, in bad way of course, but you must hand it over to them...
this whole instrument was designed by them, to get the congress to allow a deregulation of loans insurance in sub-prime market, is genius.
Simply the money went form main stream to wall street. This is how you make over 600 billion.
Greatest genius of all is Mr. Warren E. Buffett, he actually made people believe that he is a moral investor
49fiori 1 year ago
What a bunch of Crooks! Got to love the Republicans who suggested deregulation of the banks =))
MrMv344 1 year ago
@MrMv344 I don't see anyone else trying to stop it since and they aren't all Republicans. They are all part of the Greed Party.
joshua8400 1 year ago
@joshua8400 The ones who came out with this scam were Republicans,
watch----> "Enron: The Smartest Guys in the Room" watch?v=o5clNtt7P and they did not stopped with Enron, they did the same thing in many companies all the way to 2008 when the government had to step in and save AIG
Pacific Gas & Electric Co. – April 6, 2001
Enron Corp. – February 12, 2001
Global Crossing Ltd. – January 28, 2002
WorldCom Inc. – July 21, 2002
UAL Corp. – December 9, 2002
Conseco Inc. – December 18, 2002
affiliate30 1 year ago
I haven't seen anyone else trying to correct it in office since. Look past your Republican and Democrat parties because they are all members of the Greed Party.
joshua8400 1 year ago 2
Thank you for explaining this to laypeople! For everyone interested I can recommend Gillian Tett's "Fools Gold" - she's Capital Market Editor for the FT and has accompanied JPMorgan from 2005-2007 and explains in full detail what happened.
MalettaK 1 year ago
There is a deliberate attempt to hide information like this from the general public. I came across this clip because I'm studying finance and wanted to know more about derivatives.
I would never have seen this on mainstream TV though. Also it's too complicated. I'm sorry but there are stupid people out there (ie. people who think Colbert is actually conservative and his presidential run was actually serious).
khanriza 1 year ago
Lady Gaga has close to 300 million views and this video has only 14,000?
Wow, welcome to the fall of the United States. Where the hell are all the young people?
boxerguy1982 1 year ago 2
what if the people that bet that people wouldn't pay there mortgages were in charge of lowering the interest rates?
TheBlitz1 1 year ago
That man has brilliant exposition skills.
LuqmanNaq 1 year ago
basically, ex goldman sachs ceo, hank paulson, sheperds through the crime of teh century- TARP. the uneducated citizen thinks AIG got the cash, but goldman sachs, made out like bandits. total genius evil crime. and it ain't over yet
ophuichus2012 1 year ago
Great video. Good way to describe the Wall Street ANIMAL FARM. I hope these thieves will one day pay for all the misery they've caused due to their uncontrollable hunger for greed. They get the last laugh knowing how well they scammed poor people.
sikkokid 1 year ago
financial insanity
pretorious700 1 year ago
what is the term for 1:54 - 2:06? Specifically what is doing that called?
2:06 "the loans are bundled into a basket" <- what is this 'basket of loans" called?
2:47 what is this "synthetic security" called?
RobertW1809 1 year ago
@RobertW1809
154-206- what he's refering to is that banks created Mortgage-backed securities and sold the loans to sell the 3rd parties
206-bundled into a basket- means the banks breaking up the loans into small securities and selling them to investment banks such as Lehman, which then sell these to their clients
247- synthetic securitization doesn't involve actual ownership, its just a bet on a situation. for example, you can make a synthetic security which bets if the US dollar will crash.
mccoys50 1 year ago
@mccoys50 -- grately appreciated, thank you.
RobertW1809 1 year ago
@RobertW1809 The technical term for "bundling loans into a basket" and dividing the basket into small bits is creating Collateralized Debt Obligations (CDOs). The point of doing that is that it spreads the risk on many loans, making the CDO a practically risk-free investment (in theory). That's why the banks were able to make all these crazy risky loans and then sell them as AAA rated investments, conning pensions funds into buying for $trillions worth of junk CDOs which became worthless in 2008
PavedStones 8 months ago
@PavedStones -- thank you
RobertW1809 8 months ago
Heh - low view count indeed.. You know whats even funnier? Derivatives in wallstreet are deliberately difficult for the 'average' American to figure out. Which immediately renders the majority as disposable slaves to the system. Only the very few highly competent mathematicians can truly see through the derivatives.. sadly most of them work in wallstreet :P
Capitalism ftw!
kyeeza 1 year ago
Fucking idiot citizens.
leejae 1 year ago
Comment removed
jsamsonite07 1 year ago 35
@jsamsonite07 Where did you get this information? I'm not questioning the validity...I'd like to read up on this more so I'm more informed.
incognito217 1 year ago
@jsamsonite07 - all derivatives should be erased. they're all synthetic anyway! what a scam. i can't belive congress went for TARP. thats how uneducated they are.
ophuichus2012 1 year ago
@jsamsonite07
I'm hoping to find some hard data on the overall size of the derivative market world wide, do you have anything substantial you could direct me to that backs up your $1.5 quad. number?
Thanks.
P.S. I remember coming across data showing how much a certain bank held, it seams like it was GS for $800 B, but I'm not sure.
CBound 1 year ago
@jsamsonite07 No what the people should have done is understand our money system. We should have stuck with gold and silver and left money creation to the other nations. We borrowed to much fake money from the banks which gave them this power in the first place.
Example: How can a bank lend out gold when it doesnt have any?
but they can loan out ten times more than they have in reserves since money is not backed by gold. they can create money.
genesistwoeighteen 8 months ago
@jsamsonite07 There were no derivatives until the sub-prime loans were forced on lending institutions.
mardec09general 3 months ago
you're wrong, most people realize what is going on, trust me I live here. Why do you think the republicans lost last election.
AroundSun 1 year ago
@AroundSun Most people are swayed by the mainstream media. With regard to the economic collapse: there were people who were warning us, but the media jumped on the bandwagon once it became too late. We need to fundamentally change the way news and information are spread in our country.
incognito217 1 year ago
If they're un-regulated, why bother paying them back? If they're fiat bets, based on nothing, if they're not paid back, nothing would happen (minus confidence). Strange indeed. All sounds like a set-up. However, going further, I don't blame the bankers, I would too, if I were forced to give loans to people that were not capable of paying them. Gotta love leftist politics!
mbdulka 1 year ago
@mbdulka
What happened was like in that movie, where the bad guy is surrounded by the law enforcement, who wants him to tell them how to defuse the bomb. With no chance of escaping the bad guy puts his gone to his head and says: "Drop your weapons, or I'll shoot!" That's what Goldman Sachs did, and the foolish people in Washington gave in, when they should have let them fail.
mistara31415 1 year ago
@mbdulka The 'bet' goes into their assets sheet. If a companies assets are less than their liabilities then they are insolvent. They paid them because they didn't want them to crash along with other institutions. Not saying I approve that's just the reason, probably.
LuqmanNaq 1 year ago
@LuqmanNaq Yeah, I understand that ... but since this is an unregulated market, AIG (in this case), should have just refused to pay ;-) (I guess unregulated doesn't mean illegal). Whatever the case, this should all be regulated and/or completely deregulated and banks should have been saved. I prefer the latter option. ;-)
mbdulka 1 year ago
@mbdulka
The latter option, but with banks NOT being saved.
CBound 1 year ago
@CBound Yeap, I forgot to write "NOT" -- thanks for catching that.
mbdulka 1 year ago
Insurance on Bets on Loans to people that aren't expected to make the payments?
That sounds like trouble.
EeJLP 1 year ago
The productive nation-state economies of the world have been undermined and destroyed by the parasitical structures of Financial Oligarchism. This Oligarchy is making a "world-wide grab" for raw materials and food supplies.
AnonymousWhitePerson 1 year ago
Financial Derivatives are Financial Weapons of Mass-Destruction.
They are the primary cause of the current Global Economic Depression.
AnonymousWhitePerson 1 year ago
Financial Derivatives are Worthless and are now at 2.5 Quadrillion, more than the Gross Domestic Product of the entire world.
If we were hypotethetically actually able to pay off the Financial Derivatives, we would wipe out the human race.
AnonymousWhitePerson 1 year ago
450 trillion dollar market??? our biggest cash crop is gambling???
talktal 1 year ago
A / I / FUCKIN [G] WILL INSURE WETHER or not you dick would fall off or get hard ifffffff !you had a premium.....
tonmagicwon 1 year ago
I just can't figure out for the life of me why these crooks are not in jail. What is going on here??? Why aren't the right questions asked to the thieves of the corporate world? A person who works his/her ass off to create a life of wealth and prosperity ends up paying for some big hot shot bankers casino bet on a low income mortgage????? HOW DOES SHIT LIKE THIS JUST SLIDE BY?!?! These people are an absolute embarassmennt to our country, the world, and the entire human race.
jimpagliaro 1 year ago 2
trust me im the last person to wanna fight and condone violence, but short of armed revolution, do you really see these bankers or the politicians who allowed them to do what they did, ever getting their just desserts?
TheWatsonGreen 1 year ago
this is a fantastic video.
danogzilla 1 year ago
As far as i know - the first forms of derivatives were invented to secure things like the stable prices of the crops and harvests and they have been really helpful for the business. But when there are so many players in the game, including insurance companies who haven put aside nothing for back up, and one can bet on anything..it's pretty easy to turn this whole financial instruments into a casino. But even in the casions thay have some rules - they at least make sure that you don't win :)
fwnm8 1 year ago
WHEW. Explained in simple , no bullshit jargon terms. Now I understand why we;ve been royally screwed over.
ANTIDALLARD 1 year ago
Did you even listen to what Mr. Greenberger is saying? Three times the money was lost, not because people couldn't afford their mortgages, but because of the UNREGULATED bets made by financial institutions, that people couldn't pay their mortgages! 3X! So it's not "both", it's mostly a lack of regulation of OTC derivatives. Don't fall for the tea party blather.
jaschar99 1 year ago 3
@jaschar99 Yeah, so instead of "stop drinking the kool-aid", we should tell these inbred idiots to "stop drinking the tea">
publicatdamagnificen 1 year ago
"For he that hath, to him shall be given: and he that hath not, from him shall be taken even that which he hath." Mark 4:25 KJV
It's Biblical law, who is the hath? who is the hath not? in America and the World, it's better to be rich. trust me, it's easier to figure out how to build wealth for yourself and your family than it is to fix the problems with the economy of America. Understand the Federal Reserve controls the money, I would like to know who controls this private organization?
PADon69 1 year ago
rothschild.
TheWatsonGreen 1 year ago
Incredibly naive explanation of derivatives, one sided and completely lacking in substance. I can't believe he is a prof., risks are usually hedged to within a small percentile range. The actions of one mismanaged company should not be used to explain the entire industry. Imagine we did that with everything, America would be filled with GW Bush's! Think about it...and do your own research.
villyeye 2 years ago
Well this is a very clear explanation on that one side of derivatives. Who knows what other derivatives are going to blow up for someone in the future. That said derivatives can be used to improve the economy but they can also be abused. Just like many other things in life such as cars, guns and knives, they are all useful but can also be dangerous.
1337ROFLMAO1337 1 year ago
Thanks for the post! Derivatives take time for strategic planning, right? Those involved take their spot and align themselves with the ruse. Well, what is bothersome to me is the one minute investigations these guys have to face. Ok, so I didn't pay attention to these political communities cos I saw them as liars but now I've got my pliars. I'm opening up my mind and I'm questioning that which I didn't know. Otherwise, these guys will ask for more matches to add to their fuels of ill gain!
intrascoobz 2 years ago
OUTLAW Derivatives
JoeTube27 2 years ago
CASINO FINANCE IS THEFT!
kmarinas86 2 years ago 2
This has been flagged as spam show
I finally got it!
juanchisgomez 2 years ago
What a great explanation that anyone that anyone can understand - thanks for posting
jbryant13 2 years ago 7
If we're willing to let big companies fail, then regulation is still not necessarily needed. But this does need state oversight.
FatLibertarian 2 years ago
What logic is that? If you're trying to get skinny, do you decide eat more anyway? If we're willing to let big companies fail, who do you think pays for that? The American taxpayer. But what the hell, who are? We're just a bunch of smucks who let them do it and don't do shit about.
nutblast23 2 years ago
The shareholders pay for failure of a company. When a company goes bankrupt, generally shareholders are wiped out. It's only Bush/Obamanomics that require we the taxpayers bail out these companies.
oterj0 2 years ago
Casino Economics!!! How secure is that? How stable is that??
meka4996 2 years ago 4
don't be so fucking racist ya prick
moomar1 2 years ago
cringo123, why dont u go get a job and start contributing to society and the economy. People like u are even worse, u plainly suckle at the teet of us tax payers, and do nothing but squeeze a sh!t out in return. Break yo self
maspito 2 years ago
aahh .. its a casino.. ok..lol
stejomo 2 years ago
i'm lost. All I know is we got ripped off!!!
hardcoremofo 2 years ago
Great video, this guy knows how to explain things in a simple yet non-convoluted way.
Freddycd15 2 years ago 4
complaining about derivatives is missing the point. Wall street caters to greed in the first place. Capitalism is a flawed economic system, period. Socialism, Capitalism, Communism are all MONETARY systems, the only difference in ANY of them is the amount of regulation by the govt.
Support a resource based system. It's scientifically sound, and ALL will benefit.
blaziermissy 2 years ago
how do we trade our resources? how do we keep track of who owes what? with clam shells?
moomar1 2 years ago
@moomar1
Liabilities should not be traded. Period.
kmarinas86 2 years ago
Wasn't referring to labilities ...but I don't disagree with what you say
moomar1 2 years ago
Troll
blaziermissy 2 years ago
1,777 people know about this, 10% disagree, we then have 1,600 people.
gqh4nhmc 2 years ago
Shit...
zataniaz 2 years ago
fantastical
swajblogger 2 years ago
I read somewhere that the derivatives black hole is like $25 trillion. The tarp program has allotted $24 trillion.....hmmm. I wonder if there is a connection?
lapmedong 2 years ago
Where was the Fed? SEC? Rating agencies? FBI? There was not a single CPA / MBA that could glean the potential risk?? And we are supposed to believe this was all an accident??!! The supposition that this was an accident is a bit toooo far fetched.. Ron Paul, Peter Schiff, Jim Willie, Jim Puplava, Gerald Celente and Max Keiser did understand this was a scam.. Where's the prosecution effort?? White collar crime rules!!!!!!
Aridzonan13 2 years ago 3
Thanks for the clip..
High clarity info.
qwertynasigoreng 2 years ago
yeah the economical value is that the rich get richer quicker and the poor give all they have to them and then can go and die, while the rich use everything
rad4life1 2 years ago 3
Now that understand the system, support the Venus project.
blaziermissy 2 years ago
Greed.
Anothercoilgun 2 years ago
sorry bout the spelling...
trixbox7 2 years ago
i agree....i cpuld post an entire video archive describing t hese events and each will have a total combined viewing of 1000! It's really kinda sad. Wheres the education? And can you really blame those wh profit from understanding finance when all the masses want to do is visit the next hot club and drown their sorrows in alcohal?
trixbox7 2 years ago
The current financial crisis is a result of pervasive corruption, both corporate and bureaucratic.
AlexandrianDoctorate 2 years ago
This is by far one of the CLEAREST explanations of what the hell's going on! Thank you VERY MUCH for posting.
noob2010 2 years ago 3
fucking wall street fucked everybody!
unworldlything 2 years ago
288 views - America where are you!!!! Your government and your financial system is pulling the guts out of your country and all you can do is bush another burger down your throat - wake up - send this video to all your mates - this is IMPORTANT - Here in little old New Zealand we are more clued up about your economy than you are!!!
miramfm 2 years ago 10
288 views, and that's out of over 300 million people, which is counting babies too. I think they are watching wrestling or American Idle. I just happened to turn on C-SPAN, and this was on, so I pushed the record button. I thought he did a very good job of explaining part of what went wrong, and part of how we can prevent it in the future.
jbranstetter04 2 years ago 4
@jbranstetter04 i cldnt bleve it either. no one is paying attention.
chrisivy747 1 year ago
@chrisivy747 They're paying attention, but to what? Not this or the stuff that will teach them something useful as far as being a responsible voter etc. And I'm not saying to vote for a democrat or a republican, you can vote for either one, but at least get involved and get the right ones to run for office; the ones who are not in it for their own selfish interest.
jbranstetter04 1 year ago
@jbranstetter04 bless you brother for posting this.. The first clear explanation on derivaties!
davidmthekidd 1 year ago
@davidmthekidd Thank you for the blessing, I need it. Well, not really, I'm doing fine. How did you find the video?
jbranstetter04 1 year ago
@miramfm us Americans really are to dumb for our own good.
Xeoncross 1 year ago
@miramfm: what he says is mostly oversimplified. Derivatives are very useful financial instruments if they're handled well. Swap contracts facilitate many transactions and open up the door for profit. More regulation is needed however. The core problem is that regulators have no idea how these instruments work, what they mean in entirety, and they never get the big picture.
Swap contracts market is estimated at a little over 232 trillion USD. Why dismantle this industry?
TheSamithinker 1 year ago
@miramfm Your largest city, Auckland, also engages in swap contracts in trying to hedge against currency exchange risks when it comes to investments and interest rates on the loans they take out.
TheSamithinker 1 year ago
Where was this guy at the "supposedly" good times??
What! this video has 200 hits! American, nay, world public is sleeping, still happily in its nap . . . . .
Life is fundamentally shifted and the joe in main street does not realize it.
silent11shadow 2 years ago 2
He asked what the "economic value" of a CDS is. It's the same as short selling. It provides liquidity to the market and more accurately prices the assets in question.
JimmyJimmington 2 years ago
I bet Soros bought these deregulated bets.
manyleaves 2 years ago 2
Thank you Jbrans. That was thoroughly educational and I look forward to viewing it again when I'm not "half in the bag". Keep up the good work.
jbrentoniv 2 years ago
The Federal Reserve Bank is privately owned
The FED owes its duty to private shareholders!
One quadrillion dollars is the sum of outstanding fake derivatives
It's a criminal organization that caused 3 depressions in the 30's (google their retraction of money and the correlating collapse of biz & unemployment)
Then, the FEDs same shareholders bought up property and companies at pennies on a dollar!
The FED wants the USA to collapse! The FED is NOT part of the US Government!
sugarpuddin88 2 years ago 9
Look up, "Money as Debt" on YT posted by compelled2283. This explains to the tea how the banks have worked. Scary stuff. The video is really the animated work of Paul Grigon. The whole video lasts 47 minutes. Therefore you will have to find several parts. Wilson should have never allowed the Federal Reserve to ex ist. This is a scam & the elite are getting away with it. These banks make the mafia look like saints.We are slaves to the banks.Our slave taxes keep them safe & we lose everything.
manyleaves 2 years ago 3
I saw it!
Brilliant!
Now you know why Rockefeller is trying to shut down the internet via Senate Bills 773 & 778, (I have the video of Rockefeller convincing Congress to shut it down)!
sugarpuddin88 2 years ago 2
Is there any way to send it to me. I share it with all my friends.
manyleaves 2 years ago
I have the video on my YouTube site
Just download it via Internet page downloader, (do you have an Internet download manager? Just google to download one; or the Firefox page has several downloader add ons you can use)
sugarpuddin88 2 years ago
Well said.
SteelerJeff2009 2 years ago
Five Stars!
MadBadVoodo 2 years ago
AIG only insured "Super-senior" tranches that were never supposed to default and did not default according to AIG and the Office of Thrift Supervision, the "regulator" for AIG.
The bailout money for AIG went for "collateral calls" in the CDS contracts due to rating downgrades since the insured MBSs were downgraded by Mark-to-Market accounting as well as AIG's own AAA rating downgrades.
When the AAA-ratd US govt. took over AIG. that should have ended ratings downgrades payments but it didn't.
averageworkinggal 2 years ago
The Government is a growing Tumor & the illegal privately owned FED Reserve is its blood supply!
sugarpuddin88 2 years ago 5
The federal government deserves part of the blame but so does "Liberty and the Free Market".
Without "Liberty and the Free Market", we don't have the Credit Derivative Bubble and the Wall Street Securitization Bubble (the second Securitization Bubble besides the GSEs) that magnified the problem to depression level.
Every political faction's favorite scapegoat is to blame as well as every political faction's sacred cow is to blame.
The Free Market is as much to blame as the Fed.
averageworkinggal 2 years ago
Paulson, former CEO of Goldman Sachs & Treasury Sec under Bush, is involved in Bear Stears & Lehman Brothers & with Geithner (also of Goldman Sachs) & the privately owned FED Res Bank & other banking oligarchs.
These oligarchs torpedoed pensions to create the new peasant class of indentured servants without medical, retirement or savings, (with the FED tripling money supply in 6 mos inflation is astronomical & wiping out savings)
sugarpuddin88 2 years ago 2
The Fed distorts the economy making the natural regulation (fear of failure) not work. A free market cannot coexist with the Fed.
spikeslawson 2 years ago
Was it Credit Derivatives? Yes.
Credit Derivatives were integral in the Securitization Bubble on Wall Street that fueled the housing bubble in its latter stages.
Credit Derivatives also created the Credit Freeze panic after the Lehman collapse by significantly contributing to counterparty solvency lack of confidence.
Was it Fannie and Freddie? Yes.
Dems in Congress and their "affordable housing".mandates on the GSEs fueled the origins and latter stages of the Housing Bubble.
averageworkinggal 2 years ago
European & American state aid is interlocked into the International Bank of Settlements, which is tied to World Bank, which is tied into the IMF, which is like all things: Tied into Goldman Sachs!
Why don't sheeple want to be independent of Goldman Sachs & JP Morgan?
Instead their lives are dictated to by a bunch of arbitrage wielding sycophants & sociopathic criminals who profit by destroying the system!
sugarpuddin88 2 years ago