Financial Crisis Explained :ohhh:
- Thread starter Rozay Oro
- Start date
#BOTHSIDES
Superstar
Good post
so really it just boils down to greedy investors letting chainsmoking trailer trash, italians and mexicans but houses so they could make more money..... fukking everybody up.
I love the internet. I bet the Library of Alexandria was like a huge server.
I love the internet. I bet the Library of Alexandria was like a huge server.
Malik
Superstar
1. Bankers gave mortgages to anybody. Even people they knew couldn't afford it. They didn't care if you would later default three years down the line, which you often did if you had an adjustable interest rate. Joe Schmo at Bank, USA already got his money upfront. Joe Schmo wants to flip as many mortgages as possible, to get as many commissions as possible.
2. Bankers would get swaps (credit default swaps) on those mortgages, which is a basically a warranty, to further protect themselves. Joe Schmo at Bank, USA got your money upfront when you bought the house and he got most of the entire principle back when you defaulted from the Credit Default Swap. Risk free investment.
3. Bankers would also group of all these mortgages together and sell them as one giant bag (securitization) to places like Fannie Mae to further reduce risk/move it from their "books". One of the 3 credit rating agencies (Moody's, S&P, Fitch), which are kinda like Rotten Tomatoes in the financial world, would "rate" the bag of mortgages for prospective investors. Joe Schmo could give out a few questionable mortgages, make his commissions, buy swaps and it all else fails, bury these bad loans with 1000 other good loans and sell the bag of debt to some unsuspecting buyer/investor. Joe Schmo is
4. The problem.....Joe Schmo giving mortgages out like they were skittles caught up to him. The average American could make the first couple years on his mortgage. But when the interest rate (which was often adjustable) spiked up too far, he'd default. Joe Schmo and Bank, USA were now carrying a ton of subprime debt (worthless loans). The ratings that the credit agencies gave those loans were manipulative, which fooled alot of firms/investors into unknowingly buying toxic debt. Investors had now caught on and banks couldn't move the toxic weight as easily anymore. Now Joe Schmo realizes he is fukked and goes crying to Capitol Hill that he needs a bailout or else the financial sector is going to collapse. That's real rich coming from you brah
5. The next problem. Almost like a bank run, all of these holders of the toxic debt swarmed places like AIG to exercise their credit default swaps. Which again, is a basically a warranty that offers back some/most of your money in the event of a default. Though AIG gave out all those credit default swaps, when the time came to pay out, they didn't have enough money
Enter another government bailout.
2. Bankers would get swaps (credit default swaps) on those mortgages, which is a basically a warranty, to further protect themselves. Joe Schmo at Bank, USA got your money upfront when you bought the house and he got most of the entire principle back when you defaulted from the Credit Default Swap. Risk free investment.
3. Bankers would also group of all these mortgages together and sell them as one giant bag (securitization) to places like Fannie Mae to further reduce risk/move it from their "books". One of the 3 credit rating agencies (Moody's, S&P, Fitch), which are kinda like Rotten Tomatoes in the financial world, would "rate" the bag of mortgages for prospective investors. Joe Schmo could give out a few questionable mortgages, make his commissions, buy swaps and it all else fails, bury these bad loans with 1000 other good loans and sell the bag of debt to some unsuspecting buyer/investor. Joe Schmo is
4. The problem.....Joe Schmo giving mortgages out like they were skittles caught up to him. The average American could make the first couple years on his mortgage. But when the interest rate (which was often adjustable) spiked up too far, he'd default. Joe Schmo and Bank, USA were now carrying a ton of subprime debt (worthless loans). The ratings that the credit agencies gave those loans were manipulative, which fooled alot of firms/investors into unknowingly buying toxic debt. Investors had now caught on and banks couldn't move the toxic weight as easily anymore. Now Joe Schmo realizes he is fukked and goes crying to Capitol Hill that he needs a bailout or else the financial sector is going to collapse. That's real rich coming from you brah
5. The next problem. Almost like a bank run, all of these holders of the toxic debt swarmed places like AIG to exercise their credit default swaps. Which again, is a basically a warranty that offers back some/most of your money in the event of a default. Though AIG gave out all those credit default swaps, when the time came to pay out, they didn't have enough money
Enter another government bailout.
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Then who gets their butthole plungered in the end?
Your everyday Joe, who lost his house, lost his job cause the economy crashed, and now has to pay tax increases because of the bailouts given to banks.
The rich scratching each other backs while you got this itch in the middle of your back you can't reach
As long as you understand that a ''crisis'' is to explain shyt.You straight.
REdefinition
Superstar
The American Dream By The Provocateur Network
Another good video that breaks down the Federal Reserve.
Another good video that breaks down the Federal Reserve.
mortuus est
Veteran
Do we need to know this? will some of us even own a house? we are going to do soon anyway.
LOUD
King Of All Kings
Saw this in school some good shyt
But they left out the part about how they denied black families though
But they left out the part about how they denied black families though
The Nigerian
The Realest Member of TheColi
Libertarian, gold-hoarding, conspiracy theory garbage.
Funny cartoon, though.
First, this video isn't designed to talk about the racial perspective. Secondly, Black families weren't denied loans outright, they were just sold really sh!tty mortgages when compared to their white counterparts. They cover that starting in 6:47.
Action Jackson
Can I live
So how do I get a sub-prime mortgage?