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I liked the visualization but it needs a slider bar & a countdown timer. Thing takes about five minutes to play (guessing) & I almost ditched it in mid-play.
and the reason this isn’t playing on places like cnbc, cnn, and others is? probably it would explain it too well and it would cause the people to even start tossing vegetables at the bankers, like they did in the age of the robber barons.
The talking-heads on TV say there is a crisis of confidence in the market.
I disagree. I have confidence in the market. I don’t have confidence in the swindlers and thieves who are running the market.
If the government wants to restore confidence in the market, all they have to do is FIRE all top-level management at the Federal Reserve and the Dept of the Treasury. And JAIL the swindlers and thieves who have been running the investment banks and insurance companies.
And while we’re at it, just make sure that anyone who has ever worked at Goldman Sachs in the last 20 years is never allowed to have anything to do with banks for the rest of their lives.
@1 there is one, just hover your mouse over the video and you get all the video controls as well as a timer.
#3 chuck – Don’t forget to add anyone in the government that pushed the sub-prime crap and told us all that it would be ok.
Excelent explanation! Great video! Should be all over the news…
@3
This video dosen’t seem to point out the “evil” part of this fiasco. At most this video shows how the investment bankers simply let sub-prime mortgages occur with out forethought.
I suppose this is the “evil” part of it, even though it seems like they lost money from them, and went bankrupt anyway? It would seem “evil” if they were able to make money off of this, and ran away to Aruba, but it seems to me everyone involved went bankrupt.
If it’s a matter of incompetence, that’s not evil.
That’s an excellent explanation with one major flaw: it fails to point out how CDOs that were actually composed of significant amounts of BBB and unrated mortgages were rated AAA by the rating agencies. It also fails to point out how the entire scam was based upon the very obviously flawed assumption/calculation that mortgages would continue to rise at 6-8%/yr _ad infinitum_.
#8: Thank You.
I agree it is a good visualization, but highly flawed.
Further more, it also doesn’t point out how the Federal Reserve is in fact privately owned, even though they are a “division of government”. What a joke! The US president gets to select the chairman of the Fed off of a list created by the board of governors themselves.
They know the repercussions of keeping interest rates so low, yet they did it anyway thereby creating the housing bubble. This has all been planned for a consolidation of power by major financial players, with complete disregard for the rest of the world. My 2 cents.
Excellent:
Recipe for Disaster: The Formula That Killed Wall Street
http://wired.com/techbiz/it/magazine/17-03/wp_quant?currentPage=all
[Please drop the WWW from URLs as WordPress doesn’t display it properly… plus it’s unnecessary. – ed.]
It would be nice to visualize what will happen when interest rates are way up again… Say 10% in 5 years time…
Borrowing $500,000 at 3% to buy a $575,000 home, suddenly becomes very unaffordable for most.
And perhaps the new discovery linked to below will be even more useful as we enter the (non-Japanese) “lost decade”:
Why Hair Turns Gray Is No Longer A Gray Area: Our Hair Bleaches Itself With Hydrogen Peroxide As We Grow Older
http://sciencedaily.com/releases/2009/02/090223131123.htm
[Please drop the WWW from URLs as WordPress doesn’t display it properly… plus it’s unnecessary. – ed.]
There needs to be two videos. The first should be educational. This one will work but a couple of shots at investor in CDOs need to be removed. Not everyone was evil.
The second video should point out all the lying and cheating and actual shenanigans that went on. Anyone want to take a shot at it? I can write it but I can’t do video.
what happened was nothing more than a ponzi scheme run by the banks and mortgage brokers, etc…
why are they not in jail??
It entirely misses the instructions that congress gave to Freddie and Fannie telling them that they MUST do sub prime loans. But otherwise it does a nice job.
Very good, I liked that.
Very nice, I liked that.
Yeah, my posts got screwed up somehow (hit the submit button twice by accident creating a duplicate message, didn’t know the previous post did go through, and created a new post different than the first so it would go through). Ha!
One new thing I learned from the video was that families who can continue to afford making mortgage payments default because they don’t want to pay for a house that has lost its value. Is this true?
In a crisis we need a target to put all the blame on. We can’t point to Osama bin Laden for this one.
I got an idea!
Let’s blame Eckhart Tolle and his popular belief about living in the “now”. This is clearly what the bankers were doing. They were making money in the present.
Put him and Oprah in jail.
#19, One new thing I learned from the video was that families who can continue to afford making mortgage payments default because they don’t want to pay for a house that has lost its value. Is this true?
Yes, it is true. I know of three families in my neighborhood who did just that.
One of them moved into a rental house — across the street from their old house — because the rent was $500 cheaper/month than their payment. It was an identical floor plan but the owner already had it paid for.
I still stand by my idea that in order for this crisis to get fixed we need to allow the mortgage lenders and banks who caused this fiasco to take the hit. The responsible homeowners who may have gotten sub-prime loans but are sticking it out and paying off their mortgage on time should have their mortgage adjusted such that not only do they get favorable interest rates they get the principal adjusted to current market valuation.
You have to protect the base, the average American who constitutes the population of our country, not these asshat organizations who perpetuated this mess. Sure, the sub-prime homeowner didn’t have to sign on the dotted line, but it didn’t have to be made so easy either.
One thing that bothered me about Obama’s speech last night was that he actually said that his plan would allow for housing construction to be resumed. I think that is a horrible idea. That’s like printing more money and causing inflation.
We have a surplus of housing out there – STOP NEW HOME CONSTRUCTION! Unless you can afford to pay for it as in custom homes and such, discontinue housing development.
A very good presentation.
I do feel so bad for those Leibertarians that are constantly blaming Fanny Mae and Freddie Mac and the Federal Reserve. I guess they really like to forget that it was the Bush White House that made them take many of those “toxic” loans.
Not bad… it does a good job of explaining a CDO and why they work. But CDO’s are not to blame. There is nothing wrong with a CDO.
The problem is that the ratings were skewed. The rating agencies were more concerned about keeping their large clients happy than doing their job. The exact same thing happened to AA when they blessed Enron’s books. Conflict of interest.
The second problem is that there was a disconnect between mortgage makers and reality. CountryWide was the king of this. They knew they could make bad loans because they knew they could find some other sucker to take them off their hands. The rating agencies enabled this fraud by not labeling the product what it was, pure toxic crap.
Bottom line: If you are leveraged then your results, good or bad, are amplified. So a little fraud becomes a big, big problem.
I was going to post that this was very well done, but that everyone already knows this stuff. Seeing the wide variety of views in this topic makes me think it is still salient.
My view is that everyone involved: homeowners, brokers, banks, financial companies, and investors was partially responsible. The big difference between the homeowners and the rest is that the rest are professionals.
It is hard to argue that the government is a horrible manager when most of the financial sector just blew itself up.
I think its important to realize that “Finance, insurance, real estate, rental, and leasing” is 20% of the US GDP. That seems a little too undiversified to me.
http://bea.gov/industry/gpotables/gpo_action.cfm?anon=89300&table_id=23975&format_type=0
Its also interesting to look at historical data, and see how things have changed over the years.
Excellent! .
How interesting the video cites the massive house of cards started in 2001 by greedy investors with no government oversight to worry about. The perfect storm.
I really liked the ‘rubble’ shown on the last scene as it illustrates the phrase I’ve been using here often. Cool
It is called Free Market and all the Republicans love the Free Market!!!
#23,
A very good presentation.
Agreed.
I do feel so bad for those Leibertarians that are constantly blaming Fanny Mae and Freddie Mac and the Federal Reserve. I guess they really like to forget that it was the Bush White House that made them take many of those “toxic” loans.
BWAHAHAHAHA!!!
Question: If was a pure Republican problem, why was this predicted decades ago, by Libertarians?
# 23 Mr. Fusion said, “I do feel so bad for those Leibertarians that are constantly blaming Fanny Mae and Freddie Mac and the Federal Reserve.”
Where do you think the banks got the cash from to make these loans and cause the chaos?
God, some people are amazingly stupid.