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Best explaination of the financial crisis so far;)

0roo0roo

0roo0roo

No Lifer
http://www.thislife.org/Radio_Episode.aspx?episode=355
355: The Giant Pool of Money

"A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money."

with mp3 download and streaming of course

new link download

courtesy of manly
 
Originally posted by: 0roo0roo
http://www.thislife.org/Radio_Episode.aspx?episode=355
355: The Giant Pool of Money

"A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money."

with mp3 download and streaming of course
Click to expand...

marked
 
Finally got it to go.

Between 'No Script', 'Adblock Plus', and 'RedirectRemover', firefox can block everything out including ultraviolet light.
 
After listening to it, there's nothing new here. Wall Streets creation and deceptive marketing of mortgage backed securities created a vacuum for the lenders to dump their loans off to, which basically eliminated the need for lenders to quantify loan risks.

If not for the layoffs of innocent people, its a beautiful thing to see wall street choke on their own feces. 🙂
 
I preferred the comic that explained the situation. I think all important information should be explained in comic form.
 
Originally posted by: 0roo0roo
http://www.thislife.org/Radio_Episode.aspx?episode=355
355: The Giant Pool of Money

"A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money."

with mp3 download and streaming of course
Click to expand...

I was listening to it over the weekend, great explanation of what happened.
 
Originally posted by: mugs
I preferred the comic that explained the situation. I think all important information should be explained in comic form.
Click to expand...

That's a VERY important point. Care to explain why?
 
Originally posted by: 3cho
wow how i hate these wall street hating threads.
Click to expand...

That's because you're currently one of their b!tches so you unfortunately take them to heart, but little is undeserved. 😉
 
I'll have to watch later. In many of these cases they miss the important factors.

To those who have watched it, does it discuss capital flight from investment pool to investment pool en masse?

That's really the crux of the problem we are seeing. While "normal" investors flooded into the equity markets using 401k money, lowering equity returns in the broad market, private investors have become sophisticated enough globally to be able to move massive pockets of capital from one place to another, seeking alpha returns.

It used to be that "normal" investors put money into the bank, or got their defined benefit pension plans. With the advent of the mutual fund driven industry equity markets have become more plain.

Higher end investors have become more demanding. They now shove their money into hot pockets of returns, hoping for a quick buck. It was housing in many areas in the early 90's, then into Techs, followed by housing and now commodities driven by derivatives.

Housing provided massive opportunity in this area through CDOs and lower tranches of RMBS (subprime and non-conforming prime). Whereas banks used to hold these high-yeld and high-risk pieces, limiting their creation to bank capital, investors gobbled them up greedily.

When the music stopped, they pulled all capital from these markets, dropping them like a bad habit. Since no liquidity existed, people who held the assets paid up in even larger returns to get rid of them, triggering "mark to markets". As prices plummeted people who had to sell got more desperate, "smart money" bought them at severely depressed prices.

Now you are seeing the cycle come full circle. Since prices are depressed and yield is very high, many are starting to enter these areas again, providing liquidity.

Now it's up to commodity derivatives to collapse, as people go from housing, to commodities, back to housing.
 
Originally posted by: jjsole
Originally posted by: 3cho
wow how i hate these wall street hating threads.
Click to expand...

That's because you're currently one of their b!tches so you unfortunately take them to heart, but little is undeserved. 😉
Click to expand...

Many of these threads and the information they are based off of do not really reflect what happened.

Unless you are intimately familiar with the deepest concepts you cannot fully appreciate the problems.
 
Originally posted by: LegendKiller
I'll have to watch later. In many of these cases they miss the important factors.

To those who have watched it, does it discuss capital flight from investment pool to investment pool en masse?

That's really the crux of the problem we are seeing. While "normal" investors flooded into the equity markets using 401k money, lowering equity returns in the broad market, private investors have become sophisticated enough globally to be able to move massive pockets of capital from one place to another, seeking alpha returns.

It used to be that "normal" investors put money into the bank, or got their defined benefit pension plans. With the advent of the mutual fund driven industry equity markets have become more plain.

Higher end investors have become more demanding. They now shove their money into hot pockets of returns, hoping for a quick buck. It was housing in many areas in the early 90's, then into Techs, followed by housing and now commodities driven by derivatives.

Housing provided massive opportunity in this area through CDOs and lower tranches of RMBS (subprime and non-conforming prime). Whereas banks used to hold these high-yeld and high-risk pieces, limiting their creation to bank capital, investors gobbled them up greedily.

When the music stopped, they pulled all capital from these markets, dropping them like a bad habit. Since no liquidity existed, people who held the assets paid up in even larger returns to get rid of them, triggering "mark to markets". As prices plummeted people who had to sell got more desperate, "smart money" bought them at severely depressed prices.

Now you are seeing the cycle come full circle. Since prices are depressed and yield is very high, many are starting to enter these areas again, providing liquidity.

Now it's up to commodity derivatives to collapse, as people go from housing, to commodities, back to housing.
Click to expand...

That's like blaming investors on the crash of the tech bubble, suggesting it was their sudden unwillingness to buy anymore, even tho it was either pure crap at exhorbitant prices, or good company's stocks at just as exhorbitant prices.

Imagine that...another wall street pyramid scheme that's built on deception collapses. And now their portfolios are getting jammed down their throats, excessively underpriced due to the panic they created.

Gotta admit, karma's a b!tch. 🙂

That's not to say there's something wrong with the creation of these portfolios...they are legitimate derivatives...but the theoretical legitimacy of the derivative market is not why they collapsed (and certainly not why the demand for them was as high as it was either.)

Anyhow this discussion has been had before and doesn't warrant a bantering rehash of yesterdays news.
 
if i lose my job, i am laying blames on dickheads who bought half million dollar houses when their net worth is not even 1/100 of that.
 
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