Subprime US Banking Financial Crisis Explained Simply Part 2

FloridaRaider Says:

Sep 30, 2008 - nicely explained. Thank you

resevile36 Says:

Sep 30, 2008 - So SIVs were borrowing on the short-term to buy MBS/ABS/CDO from firms such as Bear Stearns?

therealcaptobvious Says:

Oct 1, 2008 - since we're talking about lenders, how do these institutions have so much inventory? Marketing a new product in mass quantities, were they using any economic forecasts or anything of the like before they created so much toxic paper?

InformedTrades Says:

Oct 2, 2008 - they did have economic forecasts called models for determining what the likely hood of the loans being paid back was. Unfortunately for everyone however their models have proven to be very wrong. Best Regards, Dave

therealcaptobvious Says:

Oct 2, 2008 - me thinks they were intending on using the inventory to further push speculation on real estate. Like a game of musical chairs with who got left with the debt if they were not sold. The fundamentals of the economy like a lowered value of the USD should have triggered some caution. It's hard to say, but $85bil debt with AIG is A LOT of value to mismanage. Just my 2 cents. Thank you for your response. :o)

InformedTrades Says:

Oct 2, 2008 - yes there are a lot of people who feel that way and its definitely not a stretch to see why. Best Regards, Dave

lfg323 Says:

Oct 5, 2008 - this is so simple. kudos for the SIMPLE EDUCATION.

InformedTrades Says:

Oct 5, 2008 - glad to hear it and thank you for the comment. Best Regards, Dave

Jzeaser Says:

Oct 5, 2008 - nice choice of wardrobe-looks like your broadcasting from jail

okydarmaputra Says:

Oct 7, 2008 - Thanks for the explanations dave, you give a clear picture bout what's currently happening in the market. Just a short question how did the financial institutions that issue s/t securities while on the other hand they invested in l/t securities manage the mismatch or the maturity gap between those two securities? thanks heaps

InformedTrades Says:

Oct 7, 2008 - hi, Thanks for the comment. Your question lies at the heart of the problem as the institutions had to obtain new financing every time their short term loans expired. As the crisis has escalated many have not been able to obtain that financing. Best Regards, Dave

okydarmaputra Says:

Oct 7, 2008 - Alright, that's cool. A simple suggestion, I think it'd be better if you also explain the roles of insurance companies with their credit default swaps that jeopardized the financial system even more.thanks again

Jeddawy20 Says:

Oct 8, 2008 - i got lots of quistions , what determin the fiqu score , and how u become cridet worthy ?

eeshanbc Says:

Oct 9, 2008 - Hi Dave, this an informative episode. However I would like to know whether, US Requires a Standard similar in the lines of SOX for Mortgage, aimed at borrowers alone? Will Fiqu Rating be suffice if Banks just follow them cursorily? In India the Market is regulated in a manner, which minimizes the chance of exposure towards such crisis. I also believe that the US Govt. should have stepped into the picture much before.

stevohorn Says:

Oct 9, 2008 - My explainantion..Ordinary folk being screwed over by fat cat financial "wizards" playing with other peoples money.As per friging normal!

followyourgut Says:

Oct 10, 2008 - Hey Dave, just a couple of questions..? Where exactly did the leverage occur? Did the financial institutions leveraged over the SIV´s? Thanks

brillur Says:

Oct 11, 2008 - Greed. Unregulated greed..

wdflannery Says:

Oct 12, 2008 - Way too complicated. Way too much jargon. Don't give a poor explaination of something complicated and then say it's not important. Keep it simple without extraneous stuff.So, they bank pools mortgages to created a mortgage backed security (MBS). Then is sells it? To whom? As an entity, or are shares sold?Who is responsible for collecting the mortgage payments for the mortgages in a MBS.Does an MBS pay a dividend? Who pays it?To be continued.

wdflannery Says:

Oct 12, 2008 - Then, are different types of shares created, that relate to exposure to default loss. Is it really necessary to explain this? We just need to know the basics.So, then someone (Citibank) borrows short term to buy these mortgage backed securities. Do they pay a dividend? Where are they traded? Who collects the mortgages? Who pays the dividends?Please re-do. Break it way down. Avoid jargon. Explain the basic mechanism without frills, variations, etc.When do credit swaps come in?

pastorOFdisaster3 Says:

Oct 12, 2008 - Great explanation! I'd also check out the Financial Meltdown Rap song/video that's on youtube.Just type in Financial Meltdown Rap

DarkRiderFilms Says:

Oct 13, 2008 - Hey Guys! We dig ya video. Check out our first movie that we've posted, it's on our profile. A 20 minute stonner comedy!

hotboiuofm Says:

Oct 14, 2008 - I am curious to know how the banks' combing all these pools relate to economic unrest? 700 bailout?

cliffwalkinfool Says:

Oct 14, 2008 - Is there any reason you appear to be wearing a prison uniform in this video?

whythebailout Says:

Oct 25, 2008 - I gave you a negative, but it was kinda funny. Hopefully you were being funny and not making any allegations.

whythebailout Says:

Oct 25, 2008 - Again thank you so much for this non biased review.