The 2008 Financial Crisis - 5 Minute History Lesson
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- Опубликовано: 30 июн 2024
- It's been 10 years since the Lehman Brothers bankruptcy, considered the height of the 2008 Financial Crisis. But what caused this behemoth to go under, and how did we find ourselves in a real estate bubble? Let's find out with a 5 Minute History Lesson.
Intro/Outro Music: www.bensound.com/royalty-free...
Episode Music:
Faster Does It by Kevin MacLeod is licensed under a Creative Commons Attribution license (creativecommons.org/licenses/...)
Source: incompetech.com/music/royalty-...
Artist: incompetech.com/
DISCLAIMER: Richard does not have a personal holding in any of the referenced companies
Sorry for the re-upload everyone! Wanted to fix a blunder I had in the original video since this is such an important topic.
What was changed?
Changelog.txt?
Some of the text where I had a spelling mistake, but most importantly I changed the $600 trillion to $600 billion (a pretty important clarification haha)
It seems since Kurzgesagt fiasco everyone is fixing their videos. Good things can come up from the bad stuff I guess. Keep up with the great job!
@@Joso997 What was the deal with Kurzgesagt?
It just goes to show some companies can't fail as long as they are backed by government. If I did something like this I would be in prison for life without the possibility of parole.
Welcome to capitalism!
Kill a man you are a murderer
Kill a million, a conqueror
Kill them all, god.
Government bailouts = Socialism
Expect GE to be bailed out soon.
Jay Blake socialism- a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. Aka the government spending our money to keep the companies that failed open.
See, that's the problem. Government is not there for "the people." It never was and never will be. It's always been there for the elites way back when the first real governments started forming during the agricultural revolution to protect the landowners. The mortgage crisis of 2008 was nothing more than a sophisticated asset bubble that burst. Just like the stock market today. It's gonna burst and average folks invested in 401ks will be the ones left holding the bag. And if the republicans had their way and turned social security over to wall street, we'd all be left holding the bag.
The more money we give these guys the more asset bubbles they create. Instead of creating wonderful paying jobs, they use that money to buy up assets we depend on for day to day life. And through manipulation, it ends up costing a ton more for everything (healthcare, school loans, housing, etc...). Look at the recent drug pricing manipulation as a small example of what's happening throughout the economic system. It's a system where almost everyone including government ends up in debt to afford basic living expenses. It's unsustainable. Simply raising wages is not the answer. We need to stop these banker crooks from manipulating asset prices. That's why we need to elect Elizabeth Warren or Bernie Sanders. They are the only ones discussing this whereas republicans want to "free the market" even more LOL.
And I'm gonna be frank here.... if Joe Biden is the democratic nominee, I recommend everyone vote for TRUMP. And the only reason I'm saying this is if TRUMP wins it will help the crash come sooner. I'd rather suffer through a quick but seriously painful economic collapse than prolong the agony for another generation of young folks.
The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.
Investing in both real estate and stocks can be prudent choices, particularly when backed by a robust trading strategy that can navigate you through prosperous periods.
You're not doing anything wrong; the problem is that you don't have the knowledge needed to succeed in a challenging market. Only highly qualified professionals who had to experience the 2008 financial crisis could hope to earn a high salary in these challenging conditions.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Colleen Rose Mccaffery” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
"the big banks wont fail because theyre not supposed to"
-bill wurtz
Tell that to Lehman 😂
@@davecrupel2817 *American Insurance Group.
same logic with chernobyl
R/unexpected bill wurtz
Dude that is a singer
The 2008 crash had a huge effect here in Ireland. We're still experiencing the aftermath of it. Dublin has one of the highest rent rates in the world and we're suffering from an extreme housing crisis. Meanwhile the banks got bailed out and those responsible are enjoying a nice huge pension.
Its insane how much a cock up in America can fuck up the entire world the way it did.... That country is a bloody liability
@@chemicalbrucey157 Oh no our banks participated in the property bubble just as much as American ones did, arguably more so. It even has its own name here, the 'Celtic Tiger' era. The Boom before the Bust.
@@chemicalbrucey157 Don’t just blame America when those same investors buying up these mortgage pools could have been from many different countries.
In Oregon you hardly saw homelessness except in large cities. Now it’s out of control because you can work 2 jobs and still not be able to afford rent. It’s a crime, good people turned out to the streets
Yeah but they 300 pounds 60 year s old getting sunburned on island with drinking problem
"It's free money!"
Biggest lie ever told. Someone tells you a way to get free money, it's going to end bad every time.
In this specific case where credit rating agencies overrated CDOs, credit default swaps were mispriced and while it was not "free money", they were pretty profitable investments while they lasted
There is a saying in Poland that the only thing you can get free is a purple eye.
It's a bubble, it IS free money, as long as you have the common sense to get out in time before it bursts.
Free money, worth as much as you paid for it, ironic isn't it?
Exactly, nomatter if its a friend or lottery etc it wont end well
Appreciate the time taken to correct mistakes - most don't bother and I think it's important to address it on topics like this!
The memory of the 2008 crisis still feels kind of fresh to me. The house that my parents saved for 10 years, lived for in 2, gone within a year, It was awful. 2020 now and It's a lesson for me and my siblings to learn.
What made them lose the house? I'm sorry if I sound rude, I don't mean to be. Was it because the financial crisis caused your parents to lose their jobs?
@@jonestprades6520 that’s what happened to my family
dad was hit by the lay offs made the rent unaffordable as my mom is disabled and he was the only income
on the upside though we were able to secure a cheap foreclosure in the aftermath lol
The financial crisis hurt man. My dad lost his job (worked in mortgage industry), my mom had to pick up work for the first time since the early 90s, and we lost the house since our landlord defaulted. I envy those who only have to experience the Great Recession in history class.
Not to give responsibility to others for your mortgage even for some paper money to throw instrip
I’ve learned from history that whenever i hear “free money” or “infinite money glitch” or “it literally can’t go tits up” to prepare for the worst. Remember kids it works until it doesn’t and then it implodes and ur in debt :)
"and then it implodes and you're in debt" was hard to read
And remember that for all the money that you get, another person (or group) loses that money. You don't want to be that other person, and you can't get around that fact (unless you are in the/close to the government).
WOW, it took you 5 small minutes to explain this whole very important subject, and I am sure it will take me much more to re-watch your presentation to re-understand what it was all about and how it happened... (after a concentration of 2mns, I got carried away by your nice and funny illustrations not to forget the sound effects!!!!)... Thanks for this great job.
Just watch a movie called the big short it explains everything
@@anonymousandy5574 *Yes, FBI?* This comment right here!
@@SuperNineThou Yes, good adaptation. The book, though, covered the analysis put into the evaluation of mortgage quality that made shorting CDOs an almost surefire bet. Worth the read, if anyone's go the time.
Try watching The Big Short
@@SuperNineThou I did and was still lost afterwards. This vid help clear it up insofar as "selling the same one thing bazillions of times is not a good idea" is concerned.
Just as millennials were leaving college and trying to get into the workforce, this is what we were met with (that and 9/11 in HS). My friends could only get temp jobs, working up to 3 months at a time. Went on for years. Most millennials still struggle to afford and buy homes. The goalpost keeps getting moved.
And the boomers who caused this continue to blame millenials to this day although hating on Gen Z is gaining popularity for that group.
@@tek1645 honestly. The government is filled with the Boomers and they refuse to retire. Pushing around their “back in my day” memories. Worst generation ever. They project everything they think about the younger generation.
@@tek1645 Boomers are getting their revenge on the world for doing the same thing to them in the '70s.
I just started my apprenticeship when this went down so I was lucky in that way
Just keep living below your means, pile up as much cash as possible, avoid consumer debt. Then when the market crashes again, use that pile of cash to jump on opportunities. This may be cheap stocks or cheap houses. Hold the the line until then.
All three of my dad's biggest clients went under in 08 (Lehman was his top client, he's a commercial real estate appraiser.) It was the first time I can remember my parents being worried and stressed in front of us, they normally hid all that stuff pretty well. Now as an adult it's interesting to see how a lot of my fears over financial stability and the economy started that year.
Sorry but it was Lehman Brothers INVESTMENT firms that went under. I don't know if the failure of the investment side caused the problems with their real estate business or not. BTW, as I posted earlier, I worked 12+ years in the mortgage backed securities department of Lehman Brothers, so my information is first hand.
@@bjbell52 I was a kid at the time so I don't really know all the details but he appraises commercial real estate for financing & investment purposes. Lehman was his biggest client and once the financial crisis happened that all changed and he had to build some more relationships with other banks to make up for the loss of their business since Lehman no longer needed appraisals. That's all I know about it, but he didn't work for their real estate business specifically (he works for a real estate and investment firm that takes bids on appraisals for banks & investors etc) so like you I don't really know about that either. All I remember about that time was the stress he was under for a while.
@@nothoughtsjustphotosynthesis The department I'm talking about bought and sold mortgaged backed securities and TBA's. That's entirely a different business.
What ticks me off is places like Fox Fake "News" who claimed poor people buying houses caused the crash and that isn't true at all. Most of the problems were caused by derivatives (credit default swaps). There was actually a law that passed that made regulation of them illegal. I know for a fact that in 2007, on average for each MBS there were 7-10 derivatives used as insurance policies.
It was not the CDS these were only the insurance contracts. Its the banks writing these bad loans
On top of that the CDOs
Hey! I paid for 5:00 and only got 4:59! What gives!
Sorry, The Profit Margins are small! Like 1%
The final second is your happy moment of educated clarity at video's end.
Negative interest rate. No worries! We'll set up 'x, y, z' and maybe another 'a' company to earn fees fees fees and what, more fees..oh. were earning to much, oops, guess we'd better sell x,y,z to superannuation compnies on the quiet just before next downturn..nobodies saying boo about this ever
The 5:00 bubble is bursting. See you in debtors' prison.
Taxes...
The last crash was bad for everyone not prepared . Thanks for the reminder!👍
and the crash wasn't even THAT bad which is the scariest part. The next crash will be catastrophic
Wait for what is coming. This was just a wine tasting.
@@nuvisionprinting when is it coming
@@darkorbitpro1 soon, too soon, be as ready as you can be at all times no matter the hour or how long or little one must wait. For too many it shall be far too soon when it arrives.
@@H3c171 the last crash is saved by pumping more money. It did not recover properly. please at least let this crash recover slowly and properly.
Whose here after SVB and Signature got shut down.
I am
Yeah, never again ... and again ...
Uh oh
Where is Luke and John?
Here we go…..
I was an upperclassman in high school in '08. My dad filing for bankruptcy, my parents' divorce, the foreclosure on our house, and the evaporation of nest eggs like mine and my siblings' college funds were some of the immediate effects. The events over two years completely changed the directions of our lives - the fallout quietly permeating for years in different ways. I learned two extremely important things: 1) how to stand back up after being knocked down 2) Greed will *always* trump common sense and decency in a society enslaved to Capitalism *gestures broadly to Citizens United in 2010 and the partial repeal of Dodd Frank in 2018 which somehow didn't include the full reinstatement of Glass-Steagall when it was drafted and passed into federal law*
Citizens United was a very important ruling. The government was trying to prevent companies from spending money to promote their political opinions. That was a clear violation of freedom of speech.
Thanks for your insights. In 2008 I was in 3rd grade and didn't know it happened.
This 2008 scam only hurt the dumb.
There’s another aspect to this:
I was living in Florida when 2008 happened. I remember a couple of years before the crash, a knew a couple of people that didn’t have a pot to piss in, all of a sudden were buying houses. This video isn’t lying about how loose the lending became. Even the church my mom went to got into the “rental property” business. The daughter of the preacher and her new husband bought 10 houses in one year. The preacher and his wife did the same, the church choir leader and his wife? They literally started a company, and had plans to build a whole subdivision (I’m not kidding when I say this, they showed us the blueprints to the subdivision). I’m not gonna bog the comment sections, but the TL;DR version is the preacher and his wife lost all their homes and had to move themselves and their 7 kids into the church, itself. Their daughter and her husband literally lost everything. They were riding off the thousands a month they were getting from their rentals, but once those balloon/adjustable payments hit after a year or so, they couldn’t afford day to day expenses, and they just had a child. Husband had to enlist in the military. The church choir leader? That was a doozy. They were also in the process of building this gigantic house that had a butlers quarters and all that, but when the crash hit, the house was only half finished. The bank said they didn’t want it, but since it was mortgaged, they were still liable for the payments.
Yes, it’s so heart wrenching that they were preying on these people. I watched the movie The Big Short (which is basically about this crisis) and apparently there was something as NINJA, no income no job application. They were legitimately allowing people who had no jobs to take out loans that they would never be able to pay back. It just goes to show how inhuman greed makes us.
Sounds like they should’ve heeded Jesus’s advice about moneylending and greed.
It's good to know some people who rode high on the hog had to pay for it.
Florida had a massive housing boom in the 2000s even more than the nation as a hole. And the stronger the boom... the harsher the bust
@@Sara-ik5po It's stupidity, not greed.
Making loans which can't be paid back is not profitable.
"Greed should never trump common sense and decency"
Hahaha, good luck with that. Never going to happen sadly.
not while we live under caitalism. because capitalism trumps everything and capitalism is greed.
Unlawful_Falafel
Capitalism is also the reason RUclips exists and you have a platform to voice your shitty opinion on.
Capitalism is also the only fair system out there, because it’s everyone for themselves.
It’s not fair if I’m a rich dude and I have to pay 90% of my earnings in Taxes, so that the government can decide what to do with my money. That’s what happens in communism and socialism.
@@consistentinconsistency3867 no. the idea that people could not create or innovate under a different system is complete and utter dogshit.
the idea that we're so enlightened that there's little we can do to improve our current paradigm is misguided, hubristic and keeps us from finding even better solutions to problems and resource management.
capitalism is a load of horseshit stapled together to keep from falling apart. one can admit that without directly endorsing something else (though actual, iterative democratic socialism accompanied with a shifting of class consciousness would probably work great), but also recognize we should always be looking to improve, and some things don't really hold up to the academic rigors of time. the world shouldn't run on 10th grade economic understanding
Chizom Wali our system is flawed and im taking action by voting for yang 💯
@@consistentinconsistency3867 Wrong. Capitalism in it's purest form would've never allowed for people like Bill Gates to exist. In it's purest form, you had pseudo-slave labor in factories as the doomed, damned fate of most of the population outside the select few who had the "superiority" needed to excel in the market.
"Everyone for themselves" is a fair system to you? Okay, hope you like having to pave your own roads and highways then. Hope you don't like having a government or police force providing enough incentive for murderers and rapists to not attack you on sight. You don't get to live in civilization and say "everyone for themselves" is a fair system, because civilization is BUILT through cooperation.
"If I'm a rich dude and I have to pay 90% of my earnings in taxes, so that the government can decide what to do with my money. That's what happens in communism and socialism."
Even if 90% tax rates on the rich were a thing, they'd absolutely be fair. The rich benefit the most out of anyone from any government, especially THE government. Most wealthy people have no practical skills of their own, or even basic life skills to take care of themselves, since many are born into lavishness and have servants in their households. Governments and civilization, which includes a state-funded police force to keep order, ensures that all that money that every single rich person "worked" for isn't just stabbed and cut from their purses overnight. Without a government taxing the wealthy, they'd have to spend a vast quantity of that wealth on mercenary guards to keep their treasures and hoard them, which doesn't even guarantee safety.
The wealthy want to have as much power as possible in society, so they should be held accountable for it. Even if someone making $1 Million a year is taxed 90%, he's still living much better than anyone who makes less.
I literally lived through this at 13. And i remember it was just endless discussion and talks on all news/radio. Didnt understand a lick of it then and still mostly dont. But now i learned something
Same I was 13! I heard it everywhere but didn’t understand! I remember my parents were concerned and scared! If only I knew
@@JessicaGarcia-xf9wr Scary times but we pulled through. Lessons learned
I was just a kindergartener at the time and couldn't have cared less. Only now am I understanding the severity of it.
Well that would be impossible to do considering I'm in my late 50s and I'm more interested in investments that could set me up for retirement in my 60s, my goal is at least $2million.
As you plan your retirement, be sure to
talk with a financial advisor who can help you make the most of your retirement investing scheme.
@@harrisonjamie794 Very true, If you're looking for help
building a retirement nest egg, you most likely want a certified financial planner with expertise in retirement planning. With the aid of a coach, I grew my reserve from $160k to almost $600k during this Red season.
@@DavidAntony-gq7id How can one find a verifiable financial Planner, I buy the idea of employing the services of a Financial Advisor because finding that balance between saving and living requires counsel.
@@harrisonjamie794 KRISTIN GAIL CUNNINGHAM. On the internet, that’s the financial advisor I use. She’s verified; you could also read more about her and then communicate with her. it’s always good to do your research before putting your money into any investment.
@@DavidAntony-gq7id Thank you so much! Found her webpage and left a message. Hopefully, she responds.
4:42 hearing the DOW Jones drop 1/3 of its value actually sent shivers down my spine
Now it should do so too
How is that bad?
This is the most in-depth yet also quick explanation of the crisis that I've seen. Thank you so much for this.
The end of your video regarding it affecting the economy/people for years to come encapsulates my fathers career perfectly. He went from owning a construction business that paid his workers benefits better then the competition across his state, to being out in the field taking unemployment with the workers he had to let go as he would have lean days where he wouldnt eat so I could but sit at the dinner table all the same. The area he was based in alone was one of the biggest growing in the country, and essentially 180'd in a year. Crippled the local economy for awhile but oddly enough, not the growth. Which only exacerbated the issues.
Excellent video. You manage to give a thorough explanation of a complex issue in a surprisingly short amount of time. Keep up the great work.
So...in ten years from now you'll do a video on the recession/depression that's gonna hit us in a couple of years right?
My bet is on 2022
@@joanmasdeu4600 Well fuck that...America's dad Bernie Sanders will be smeared endlessly again then
@@IlluminaZero Time in the market beats timing the market.
I dont want it to happen, but I'm going with 2020
Can any of you give me a good reason why one should happen in a year, or Do you guys just call a resseion like you call for a sunny day
Do investors have access to student loan backed securities?
Good question!
Wait, do these actually exist?!
gotta invest in them, if they exist
A K short the hell out of them
F F y? If the students go bankrupt they still have the loans...kinda a full proof way to make money
"greed should never trump common sense and decency"
boy does that apply today...
How?
@@minecraftdoors1661 capitalism is still around, that's why
Humans will ever be greedy
I recommend this video more than that crash course one! This one is so much more informative while being simple to understand, thank you :')
This is the best and most comprehensive short presentation of the subprime mortgage crisis, you really succeeded in fitting every important aspect in those 5-minutes. Great job!
Except subprime mortgages didn't cause the problem in 2008!!!!! Turn off Fox Fake F'ing "news"!!!! The problems were caused by investments in derivatives. And that info comes from over 12 years of experience in the mortgaged backed securities department of Lehman Brothers!
The bit that everyone always leaves out is the Government's role. They saw that middle-class and up families owned homes, and somehow concluded that if everyone owned a house, than they would all be wealthy (rather than houses being expensive). So, under Clinton, they passed anti-redlining laws that made it hard for mortgage lenders to refuse mortgages. Afterwards, some of the larger lending groups, lobbied to be able to have higher interest rates. Because, until the 90s, there were laws that set the maximum possible interest rate. This allowed them to make these predatory loans. Bush expanded pro-homeownership laws in an effort to broaden his appeal.
Really loved your video.
How do I save comments?
Those are good points.
But the video does mention the government's involvement- Fannie Mae and Freddie Mac, two government organisations tasked with encouraging mortgage lending.
@@mm-dw2yh while true, something that is left out is the extent of that interaction. Freddie and Fannie had quotas that they had to meet, where they had to buy up loans that were given to [at or] under median income earning families. Clinton increased that quota from 30% up to 50% and Bush increased it from 50% to 55%. That meant that Freddie and Fannie had to buy up loans while meeting a quota where 55% of those loans were originated to families that were making below the median income. That is what led to Fannie and Freddie holding 70% of the subprime loans during the peak of the crisis, which was nearly 20 million subprime loans. [Source of information: Thomas Sowell's book, "The Housing Boom and Bust"]
@@MrThatguy333 I recommend taking a screenshot and then saving that screenshot to a special folder on your device. Sorry that this is a roundabout way of doing so, but it's the best I've got.
I'm so glad I found your channel! I had this topic in my economics class but never really understood it. I fully do now
I love these 5 min History lessons!
Two of my favourite subjects!
Oh I remember that year. During my sophomore year, mainly new teachers got the pink slip and my dad was laid off his engineering job.
I'm wondering why you omitted the key fact that government guys like Frank were pushing lenders to make loans to risky borrowers, in the naive goal of expanding homeownership to the less affluent.
because he's a democrat and the Democrats never acknowledged that they did this
True it was the central banks that started huge credit creation which fueled the crisis as well as Freddie and Fannie chugging it along not saying the free markets innocent though
That's a hard one for the left to admit. Anything that will make brown people look bad, yeah, forget it, they won't go there. Glad I found this comment so I can move on and not watch this guy blame it all on capitalism. Prost!
Good point. Many people overlook that fact about govt interference in homeowner policies.
Triplecap maybe because it’s 5 minutes 🤷🏾♂️
I have watched multiple documentaries and movies regarding the 2008 financial crisis. This was the first piece of media to use proper visual and explanations of what happened. Thank you!
And all it took was 5 minutes!
Amazing Channel, this is so much better than watching TV or Films, will have to watch this a few times, a lot of information to take in
You should make a video about what is happening in the current bubble. Homes selling 3 to 5 times what they cost to build isn't going to last forever. Especially once some homes builders that want to get their foot in the door begin to see that they can still make good profit and not charge a ridiculous amount.
This is how I lost half of my retirement. Awesome. I got set back 10 years.
This video went high over my expectations - best explanation I've seen so far
😄 Boy, I love the fast-paced, humor-sprinkled delivery in this format! 😎👍🏼
I remember getting my first proper part time job not long before the recession hit in 2008 and lost it after only a few months in, then the shop shut down as well so yea that was an abrupt introduction to it, then graduated uni in 2013 when things were still not great prospect wise - to this day I've never managed to use my degree but managed to keep my head above water with low wage jobs and renting, but definitely nowhere near where I imagined I would be based on what I was told growing up
After falling down a Wikipedia rabbit hole, I found myself looking at the entry for the United States housing bubble. Wanting to know about it, but not wanting to read so much material, I Googled for a video essay. Your video definitely delivered! Thank you so much!
5 mins and absolutely brilliant energy while explaining= 10/10 subbed
Thank you for this, it is very much appreciated. I was looking for a short run down on this and most other videos on this topic spend way too much time addressing things before getting started.
Amazing video! I really enjoyed it
It's important to note that not all subprime loans defaulted. A lot of people achieved their dreams with limited financial means.
I still believe that bailout money should have been invested in the "real source": Helping those lenders that just couldn't make it (often due to predatory loans). Might have saved us all a whole lot of hassle... Thanks for the really got nutshell-vid!
In 2008 my dad lost his granite factory to recession, his while life was invested in that factory...it effected him psychologically
For the past few weeks l have learnt alot in this channel than l ever did in highschool..great work
Nothing has been learnt since then, if anything it's worse than 2008.
Oh please. The current US economy is doing phenomenal. It may take some hits in the future, but it's definitely one of the best times economically.
@banana aya playa honestly, I'm so sick of it
Yeah they are already back to selling subprime mortgages too, they renamed them, but they are basically already back in CDOs.
Booming for who? The wealth gap is the widest it's ever been. Healthcare is still unaffordable and the biggest reason for personal bankruptcies. Young people are in massive debt from school loans and can't afford to live on their own because of high rents and other costs relative to wages. The jobs being created are NOT paying enough. The under-employment statistics back this up. The real underemployment is well over 15% if you count not only the unemployed, but people working part-time and those working low paying jobs.
Stop judging an economy based on stock prices, GDP and CPI. None of those show the well-being of average folks, and most of those numbers are fudged (especially the CPI). Look at this short 2 minute video of John F Kennedy discussing this. It fits perfectly for our times.
ruclips.net/video/77IdKFqXbUY/видео.html
Why? To see Trudeau fail?
The fact I’m learning about this on RUclips instead of in school should show everyone that this will happen again
Most students at school want the easy way, they wouldn’t ever want to be in a class learning financial skills (at least at my school)
An actually useful, understandable and sensible video on the topic. Thanks.
This did a great job of showing how all these financial instruments were connected and ultimately imploded together.
The 2008 financial crisis is right up there with the treaty of Versailles for a hugely complex historical timeline that takes a great deal of study to fully understand.
I appreciate this cus this video was not it 😂
Well, this aged nicely. I don't think that you will be able to cramp 2021 financial crisis in 5 minutes.
Really enjoy content related to real-estate boom and busts globally, fascinating topic. Thanks for sharing!
Cool videos. I've been on a binge of your channel recently. Keep it up :)
My aunt and uncle got hit by the subprime debacle: took out a 2nd mortgage on their home to fix it up before they planned to sell it a few years down (and move into a condo) the road and the bank talked them into a subprime loan. They had to put of their respective retirements for a few years too.
Honestly this video was fantastic. I know that your are gonna be super successful in your profession after seeing you get the cfa exams done but pleaseee make more videos on this history. They are concise, clear and very well put together!
Great videos! Thanks for everything you do
Watched the big short 2 times and watched this 3 times. Finally, I truly understand what happened.
I was in college in Ireland when this happened. In the years prior to the crash the banks would actually ring my parents house unsolicited and basically say: do you want a loan? Here, have some money. Theres loads of it! Looking back, we (society) absolutely deserved to go to the wall for this.
I was 9 years old durring this and from what I can remember my family wasn't really effected by it I was still living in the house I lived in for most my life and I never noticed any sense of panic in my family. Whether or not they panicked when I wasn't around I don't know. I just mainly find it interesting how these things happen and as a kid you really dont see the full scale of them. It creates some interesting interactions later in life.
This is why we work at a summer camp now. I’m learning about the history of something that actually affected me and my family.
Very helpful video! Even having watched the Big Short I never fully understood what had happened during the crisis
Education within 5 minutes. Our world is changing.
The reccecion caused my uncle to lose his job Which lead to him drinking that lead to his wife devorcing and leaving with My cousins to another country.. i havent seen My cousins in over 10 years now.
what countries are your cousins living in now? are they happier
Europe. I guess they do seem happy so I do get peace from that.
@@ayovenom9906 So do you not speak to eachother
Herbey Spucturs of course
@@ayovenom9906 How about your uncle where is he now?
I am enlightened in five minutes. Incredible video. Thanks!!
I love how you break things down
I remember right before the collapse a property owner who made a fortune. He was able to get $1.6M in return for a home that was assessed at around $150k. He played it smart and knew when it was coming.
Sounds like he already had money lmao
Do. Not. Sell. This is personal.
Very good content
deserves more likes and views
and very interesting
keep em coming bro
I love these history lessons. Short and sweet
Its hard to believe that i actually had to live through this... my dads buisnuess closing down because we desperately needed money, my parents arguing with eachother about the fact we were on the verge of bankruptcy....
I had no clue what was going on as i was only 5 but now i know why
Did your parents divorce or they managed to tank the hit.
@@goa141no6 they were but then my mom gave birth and they backed out of it because they didn't want her to live with only 1 parent
@@ilect1690 Good to hear it.
i remember too i was only like 10 when it happened but my dad lost his job and we couldn’t afford our rent anymore
What I got is that companies, and unaware people, for money, have crossed their limits and generally dismissed them foolishly thinking they're fine, and then their string suddenly breaks with the burden of their careless economic status and then WE are supposed to take it.
I have an essay involving the 2008 crisis due tomorrow and I know jack about economics, you just saved me
Thanks for the explanation! Was very useful!
Subprime loans weren't predatory. They were designed as a way for people, who wouldn't normally be able to afford one, to be able to finance a home. The government made it mandatory for banks to offer them. And while they got out of control, it was less about predatory lending than it was about financially unsavvy people who didn't understand what a variable rate loan was.
What made it so impactful was the fact that between Dec 2001 and June 2004 the Fed Funds Rate was between 2% to 1%, then rose sharply to 5.25 in Oct 2006 until Jul 2007. So when the majority of the loans were made, the interest payments were minuscule. But when the higher rates kicked in, the rates were much higher. This rate change was key to the whole disaster, but few people bother mentioning it.
Then, if that wasn't bad enough, the economy began to slow down as productivity began to drop. It wasn't the finical crisis that triggered the economic slowdown. It was the reverse. But the crisis did make it much worse, of course.
Did somebody ever come up with the Idea to blame The FED? Lol....Might be true...
Jorn Verschoor that would be an "antisemitism" of course
Why would we blame the fed. Investment banks went rogue.
@@croatiangambler8059 "the fed manipulated the interest rate". What? That's literally the feds job, they've been setting interest rates to stimulate the economy for a hundred years.
What happened is that rating agency's got bought out by the big banks and gave triple A ratings to shit CDO's.
How the hell do you blame the federal government for the banks wrapping bad mortgages with good ones, screwing the good home buyers.
@@croatiangambler8059 Glad you seem to get the whole picture, including the knowledge and the names of 10 Private Banking Cartels that own the Fed, in which Country the Main Office of the FED is based (which is not the USA or on a USA Island), and an economic system where money has never existed, doesn`t exist and will never exist....Therefore you cannot pay a bill in the USA by definition (but you can discharge a debt).....
@@gordonrules123 Because they are the head of the snake....Privately owned...They decide how much money gets printed.....As you can see in every Third World country ....
I really love the way you tell the story !
Great video!
Lesson: Seemingly free money always has a hidden price, usually too high to pay.
Lesson just blame boomers
And just like that, you can again get a mortgage with a 580 credit score in 2019.....
Isn't everyone predicting a recession to happen again in 2020?
@@massineben7198 yup.
Many people act like this is normal. All the Same symptoms of 2008 are happening again. It’s very easy to buy a house, we are trillions in debt, and the stock market is breaking records (unstable growth).
Where the hell can you get a mortgage with a 580 credit score? I was denied at 715 in California... Had to wait 6 months for it to rise enough to be accepted. That is with 25% down...
ADM Don’t live in California. It’s the most expensive state.
Very good viedo. Writing for a project for university about it and you covered all the important points imao.
BOY.. you should make more animated clips like this. Excellent content
For context: a synthetic CDO, which is mentioned very shortly here, is a CDO made up of the (insurance) premiums paid on a Credit Default Swap, instead of the similarly-structured payments on a mortgage repayment. This means that the investment banks creating synthetic CDOs didn't have to raise the capital to make a loan for an MBS; instead they could rely on mortgages not defaulting to not pay out the insurance (CDS) on said mortgage, and turn the insurance premiums into an effective replica of a CDO, loaning-free. This got extra bad when people started buying CDSs on CDOs and synthetic CDOs, because then exponentially more capital was at risk, yet exponentially further from the thing they were really betting on.
wow great video! Also literally one of my finance professors used one of your videos to explain options!
That's awesome! Glad they found it worth sharing
i needed this for an exam, idk if it's accurate but it was explained well and i understand it great. thank you
Great video Richard, I know its probably because of the limited time, but I think you were not harsh enough on the government for their role in the crisis. They tried to incentivize the "American dream" by forcing Fannie and Freddie to buy a increasing number of subprime loans, which increased demand for them exponentially to the point were these companies begged banks to make more terrible loans, etc, etc. Banks and insurers were definitely to blame, in part, but congress and other government entities messed up terribly by trying to "give everyone a home", even those who could not afford it. Keep up the great content!
Waiting for a video on the 2020 Recession.
Everyone is saying that. If we hit a recession, people are saying it’s not going to be a bad one like 2008. The problem is investors and the government don’t know how to control their money. Everything is about spend, spend, spend. I always say that the government should open a savings account and put x amount in the savings account and use whatever they have left to spend. It’s that simple. The problem is investors and the government don’t have that type of common sense.
@@JohnAckerman93 if there is a recession that hits in 2020, you can blame the Democrat party! A large part of the economy is public confidence, and the Democrats have been talking that down ever since President Trump was elected! Also there is the October surprise, in 2008 the Democrats use that to destroy the economy to get Obama elected
Yoinks
Christians Pray for USA you’re crazy
@@JohnAckerman93 this comment did not age well
2008 never ended.
Love your videos!!!
Really good vid, you saved my history project due at midnight.
It also scrwed over students. I graduated college in 2009, and it was impossible to get a job because people were willing to take any job, even something that paid less. And of course these people all had more experience and were willing to work for the same amount so they always got the jobs.
And despite all this, no one and I mean no one was punished despite the damage done they’ve caused to a lot of families
What a country
We had no subprime mortgage crisis in Canada because the Canadian government did not demand 'affordable housing' for the poor by making the banks lower mortgage requirements.
Tx for the explainations !
2021 and same thing is happening again but this time it's with #nakedshorts. AMC and GME will be remembered. do not bail them out this time.
I understood this much:
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The big short is a pretty good movie about this shambles. Not being an expert by any means, i dont know how accurate it is but it helped to give me a beginner understanding of the subprime mortgage scandal
thanks yt, thanks for having this video in my home page for weeks