I remember in November of 2008, i was 14 years old when i saw the terrible look on my dads face when he said we were loosing our beautiful home. We had to move to some horrible house that had mold, dirty carpets, and no central heating or ac. My dad had lost his job and was struggling to have food on the table. I felt useless/helpless becuase i couldnt do much to help, It was very tough but in the end we survived. All of this just made me realize how much of a hard worker my dad was, he never gave up. Now im 22 years old and we have our own business now, and a beautiful home
I was 9 years old in 2008, and my father worked for AIG. My recollection of it was that my dad and I were at a local restaurant and he was reading a newspaper (an actual paper, ye yungins) and he just told me "Nate, we have made a mistake."
I was 7 in 2008 and my mom and my siblings moved to Mexico which is where my mom is from and moved with family there for about 8 months due to this crisis. My dad had to stay at the home we left and hard to work a tough job as a truck driver. We later moved back when my dad gave us the OK
I was the same age. In my country it was felt differently but I remember that I was always asking for the cheapest ice cream, thinking that was the way to help my family budget :))
I was 12 in 2008, my dad was an electrician and my mom a maid. Both lost their jobs and we had to survive off of 300 dollars a month and stale church hand outs. It was like that for 2 years, horrible times
I was 11. My country was thankfully a lot less affected by the crisis than most other countries so I barely felt its impact in my everyday life, but they were talking about it a lot on TV so one day I decided to ask my dad why is there a financial crisis and it went like this: Him: "There are some business people who borrowed money they can't return" Me: "So why did they borrow it?" Him: "Because they thought they could give it back" Me: "So weren't they too irresponsible?" Dad: "Yes" Me: "But dad, why are people like that?" Dad: (pause) "Son, now you can finally realize what type of people await when you grow up" I'm 21, and this was one of the greatest life lessons I learned yet
And we, the hardworking taxpayers, bailed the bankers out so they could go on giving themselves tens of millions of dollars in bonuses and living in luxury on their private islands.
I was 8 when the crash happened, so I was blissfully unaware of what was going on. Now learning about what happened and having recent experience with loans, it sounds absolutely absurd for banks to give out credit without checking proof of income. Like I audibly screeched when adriene said that.
@@seeDiersoilcrossrowds my thoughts exactly. You'd be surprised how many people stuck themselves with ARMs or balloon loans, and then call and complain that the rate went up, or that they found out about the balloon payment when they most likely failed to read the mortgage note.
mort debt 15 trillion, CC debt 1 trillion student loan debt 1.5 trillion. most of the money circulation is bank credit. Loans create deposits economy expands, loans paid back economy contracts. The problem is bank credit. The solution is deficit spending.
3 years later still no Student Loan Debt Bubble. The reason is... You owe the government and the government, always ALWAYS will get their money from you. You can never default or call bankruptcy.
I used to be a large format printer. The firm I worked for printed blueprints and our bread and butter was home builders. When the crash hit nobody was building new houses. My firm was hit hard and even though we switched over to more school and hospital plans I got laid off in the 3rd round of layoffs. The firm went from 200 employees to 80 in 6 months. That was the best paying job I ever had.
The Big Short was a great documentary of exactly who the players were and what happened (mostly behind the scenes), but this "Crash Course" was really good at giving an overview.
My first year of college was 2008. My dad worked in the auto industry. My mom was a realtor. Talk about the worst situation at the time. Ended up having to join the Army to get some reliable income and put myself through school. Ended up being a great decision but man that was a tough time.
I was 8 in 2008, and I remember my dad putting up our house for sale and it being sold right before the crash in 2008. We were extremely lucky quiet honestly, it really pisses me off that so many were hurt because of these financial company's and banks who were a little too big for there briches.
Kyrsten Carlson back in 2009 I had a friend told me that her father was having heart problems. I asked why is that? Because Chase Bank was going to close their home.
My parents got lucky. Back in early 2008 just before the crash my parents had gotten a house with two mortgages. Fast forward two years and one of the banks went belly up and the first mortgage was forgiven so my parents ended up with half the payment and an a suddenly huge equity in the house. We had also started our own business and barely managed to get by. Looking back I can't believe we survived it!
Oh wait, we survived the 2008 Financial Crisis? Please excuse me, i need to return to my secret lair, grab all the weapons and ammo that I have been stockpiling for a revolution, and sell all that crap to make some money back.
+Achillez It has indeed been ongoing with like 4 if not 5 by now, federal loans over the years since 2008. Which makes the economy artificially recovering, and the feds are just printing money, so after a couple of more government loans, and we will be worst of then 2008.
+OMGltsFred I don't think so. The reason is the exponentially increasing nature of economies. Currently all the wealth of that exponential increase accrues to a very few really wealthy institutions, and not to most workers. This makes it seem like the economy is failing. In truth, the economy has continued to grow at the historical mean of ~ 3-4% annually. This means global wealth doubles about every fourteen years, as it is on track to do now. In 2022, the Dow will have a value of about 20,000, double what it was before the crash of 2008. The Fed printing money is just a way to pay for current projects - like maintaining the fiscal health of our civilization - by borrowing from future productivity. The reason this works is that the future is way richer than the present, and current debt will be worth half what it is now in fourteen years.
Josh Bobst Interesting, so when would you souppose the dept will decrease? Isn't this logic you presented, going to keep going, becuase "the future will be richer" so that justifies increasing a debt increase for all eternity?
+OMGltsFred We'll probably see a debt decrease when changes in taxes and economic growth occur. For instance, CO2 emissions taxes and tariffs have the potential to add revenue streams, without directly taxing citizens. New technologies in particular have the potential to create economic growth, as they become new exports, improve existing industries, or both. However, all this assumes the government doesn't pursue greater spending when they are no longer faced with collapse from debt. In some ways, debt is acceptable and even advantageous -- provided lender confidence is strong. This is what makes the government shutdown more dangerous than high debt, because it undermines lender confidence and threatens debt management with potential austerity measures.
I was 7 when that happened. Our bubbling growing town suddenly became a ghost town. My dad’s busy company became a 1 man army and he was suddenly home a lot more. Then we moved to a different state and my parents lost the house. My family went from comfortable middle class to almost homeless a few times. Nowadays, my parents has their company again and are looking at getting house finally
Sadly the so-called "experts" in the industry mistake "getting better" for "making it someone else's problem". What happened in the crisis? I'll tell you what happened. The US entered 2008 fiscal year with a national debt of about $9 trillion. At about the end of 2009 when the crisis was "over" it stood at about $12 trillion. Thus, the so-called "got better" actually just means they made $3 trillion in national debt to bail out the big financial institutions who caused the issue in the first place, thereby increasing the general public's future tax obligations of paying back the price of the bailouts. Literally all they did was punish the very group of people who fell victim to the crisis in the first place and rewarded the very group that caused the meltdown. That is the problem the world has. It rewards the elite and punishes the middle class. It will happen with the current coronavirus induced crisis as well. But make no mistake, the crisis is not BECAUSE of coronavirus. It is because of GOVERNMENT's RESPONSE to the coronavirus.
@@marcellenel3569 How did the big financial institutions cause the crisis? The government started the problem by making it illegal to build on much of the land in California, driving up the value of the existing land to inflated prices, limiting homeownership. In order to fulfill their campaign to make it so every American can own a home, the democrats forced the banks to make bad loans by dragging them into court for not giving loans to poor people and minorities. The banks had to create some stupid loans that these people could actually afford, and then they passed the mortgages onto the government-sponsored Fannie Mae and Freddie Mac. When the people didn't pay their mortgages, the value of the securities vanished. So the fed hit the printing press to fix the problem.
I'm 13 and recently I have just watched the movie "Too Big Short", because of my ignorance; naturally, a lot of economic terms did not make sense to my understanding, but by watching this short video representation of the 2008 Financial disaster, I have finally understood most of the terms. Thanks a lot, guys!
The big short explained it way better than this, investment bankers are scum bags and hopefully that movie helped open people's eyes, also credit default swaps are higher now than they were in 2008 so I think we are in for some fun
The movie just out, "The Big Short" does a fantastic job of showing what went on with this, even providing some clever illustrations to help define/explain the more technical sounding stuff. Brilliant direction and acting make it a must see for someone curious about this calamitous event.
Very nice explanation of what happened. We were heavy in mortgage sales and we lived The Big Short from the ground level. I can remember talking with my wife in 2005 and 2006 about how much of a ponzi scheme the housing market was. Janitors making $60K were getting interest only loans and living in $245K homes. Shouldn't be. It was an insane time to be at ground zero of the crisis to come.
i was in first grade at this time, and i remember a bunch of kids leaving my school around this time and i didn’t know why. i later realized that they couldn’t afford tuition and it makes me feel so bad for them looking back
Moment I started HS in 2008, was the beginning of a very difficult chapter of my life. I first noticed it when a lot of my favorite small businesses were closing at a rapid rate. Almost 10 years later it feels like a repeat but with new closing settings. #ThinkingOutLoud
I've been fascinated with the research on the 2008 crisis. Been following Planet Money from NPR since 2009 and they often go back to it with new information relating to places around the world.
+ian turner :\ Planet Money is a podcast though not on the Radio. It's pretty separate from the network. I would really recommend it. Has some great episodes analyzing all sorts of markets and industries over the world. But if you hate NPR then I suppose I can't sway you.
+Menko productivity is determined by expectations. if you only want to have a discussion to agree with other people, you must be new to the internet...the internet is a fiery crucible where ideas clash.
@@4-CQL Impoverished Nigerians claiming to be princes, and pretending to be hot girls on tinder have access too. Doesnt mean they can farm or hunt food.
I was about 7 years old when the market crash happened, my mom and dad had JUST bought a home after it happened for 90,000$ our home is now worth 550k!
Correction. Government backed by Wall-Street is who Manipulated this staring with Bill Clinton's home affordability dream. His dream came from being in bed and getting paid by Wall-Street investors that put money in his pockets in exchange for Subprime Lending which these investors invested in and made a killing from.
You are blaming the wrong people. It started with the Fair Housing Act of 1968 and Freddie Mac and Fannie Mae, further back, The Federal Reserve Act of 1913, Quantitative Easing caused this as well. The Banks were forced to lend out Subprime Loans, and as a result it caused a housing bubble, and killed the Automotive and Banking Industry, which led to the failsafe, the Bailout. Thus we repeat this sad cycle of detrimental regulatory laws that cause our people to suffer as a result. We live in a Corporatist society now, not a Capitalist one, the large Corporations are just too big to fail.
Liberty At Its Finest thats very intresting. i didnt know/think for a second that the bank had to lend out subprime loans. so your saying they were forced to, because of quantitative easing? what is quatitative easing?
You know who was manipulating this? I have friends who know people who took out mortgages in order to buy more houses because of the housing boom. They repeated this and they "earned" a LOT of money and "owned" a bunch of houses. Of course we hate those we can't relate to. The truth of the matter is; people thought they could use the housing bubble to get rich and they gobbled up lending funds like it's theirs. Everybody tried to find a way to take advantage of the bubble while offloading risk to somebody else.
@ That makes no sense. Let's put this into play. You're a multinational bank. Who do you choose to loan to, the college student who isn't even interested in paying off his principle and consistently fails to pay bills, or a wealthy entrepreneur who has a solid business plan and years of experience? In what reality does a business give their assets to people who will lose them? That's not how that works.
@ The government incentivised the risky loans that lead to the financial crisis. They provided very low interest rates, guaranteed loans, and required banks to provide loans to low income neighborhoods in return for larger loans.
@@aneyeforcapitalism6531 now who doesn't benefit from highsight, I mean of course we can look back and say man those types of risky loans don't make a lick of sense.... Which you're correct. However that was the thought process as the loans themselves were the product... If we're listening the mortgages we're being sold from bank to banks.... That's why they though of loosening the standards for loans .... See
@ a pattern is a pattern. It's not 'edgy' it's standard knowledge to anyone who isn't a government and banker apologist. The reason the banks did not care is because they knew they would be bailed out. This was deliberate and banks will continue to do this in other markets and destabilise our economy, now with ETFs for example. Crashes are a profitable part of the cycle for these people.
James D The Clinton administration signed the repeal of the Graham Leach Bliley Act, a depression era law that kept savings banks and investment banks separated. Once savings banks could become wide scale investment speculators, everyone’s savings were on the line, invested in CDOs and MBSs. The savings banks would never have approved the risky, ridiculous mortgages that they were motivated to approve once they had an investment arm that could profit from the sale of those same mortgages.
your ability to break down economics for the average Joe and Jane to understand is top notch. You really need to create a course on trading stocks for the retail investors. Thanks for all this great content and information. Lastly get those likes up folks and share this video
+Diego Sales Peter Schiff predicted nine of the last three financial crisises. His abysmal record, never-varying predictions, and complete failure to grasp the actual mechanisms of the crisis argue against giving him too much credit. Dude has no idea what he's talking about.
+Robert Richter Nice meme bro. You should try the stopped clock one too, I hear it's very popular with other people going around preaching the infallibility of the state.
Prodigal Bard The abysmal record of constantly predicting crises that never happened before finally predicting one that (only sort of) did. And then there's his record since the crisis of predicting runaway inflation any day now -- which still hasn't happened after half a decade. As far as his failure to grasp the actual mechanisms? He predicted the wrong crisis. He got the collapse of the housing bubble more or less right, but he's gotten everything else since wrong. People have lost a lot of money following his financial advice.
I'm astounded that I just listened to an 11 minute video about the "financial crisis" and not one mention of Fannie Mae, Freddie Mac, The Federal Housing Administration, or Ginnie Mae. Well in excess of 90% of all home mortgages are either written or guaranteed by THE GOVERNMENT. Who is the real enabler of the crisis??? And contrary to the impression you gave at the beginning of this video, "things got better" only due to the fact that the Federal Reserve took unprecedented steps to kick the can down the road. Nothing was solved; it was only postponed. Have you noticed where interest rates have been for the last six years? When the next "official" recession takes hold, we'll see how "fixed" things really are.
+watcherjohnny Unfortunatly, while this is a popular idea in some circles, it never panned out in actual analysis of the collapse. It was an element yes, but its impact was really minor. But it is repeated in libertarian circles so often that many take it as truth.
+neeneko May I refer you to this brief article that highlights the enabling effects these institutions provided in "the housing bubble": www.washingtonsblog.com/2010/10/christopher-whalen-freddie-and-fannie-helped-to-create-epidemic-of-mortgage-fraud.html
I was in 8th grade when the financial crisis happened, so now it makes sense why I kept seeing homes being foreclosed and why my little 13 yr old self felt like the gov't was being terrible.
+Abe It's not that we didn't learn, it's that we forget entirely too quickly. We need an elf or something really long lived to constantly remind us, "hey, don't do that stupid thing again. It was bad." Because History class isn't doing it.
+Abe It's not that we didn't learn, it's that we forget entirely too quickly. We need an elf or something really long lived to constantly remind us, "hey, don't do that stupid thing again. It was bad." Because History class isn't doing it.
Check out the film Inside Job. One of the biggest factors in this was the repeal of regulation laws that were created after the great depression. We did learn, but the people involved basically bought the law and did what they want.
+kalibos you should watch koch brothers exposed doc. Many great organizations are trying to overturn citizens united, along with ridding the influence of money on our politicians. Never going to happen unless people starting voting more than every 4 years
Gumer Zambrano it will pop. All bubbles pop. And it’s already been securitized just like mortgages were, and that is why tuition prices are rising so much faster than the value of a degree.
More of the same will happen to be honest. Government will announce QE, print the dollar into oblivion, interest rates will drop, stimulus packages will be announced, laws will be passed to "seriously address the issue" and then we will sit back and wait for inflation to kick in, people will lose jobs and homes, government will announce a "successful stopping of the crisis" and about 5 - 10 years later it will happen again in a different market. It's how it always goes.
My friend actually just wrote a letter to politicians outlining just how bad it's going to be for everyone when that thing pops and explaining why it's actually way smarter to just absorb that debt ("forgive") and see the boost in the GDP. It sounds counter intuitive at first but it's far far more stable to do.
some of my thoughts about the 2008 recession: It happened (partially at least) because of deregulation (repeal of Glass-Steagall, etc.). No one re-regulated the market, and DIDN'T solve the problem, which makes it worse, which leads to a bigger recession...or a depression?
Business investments and interest rates are not related. That is the empirical evidence. It might have an effect on business decisions but that is very small according to studies. You can rule out small interest rates and blame asset based credit. Which was encouraged by people like Alan Greenspan and the Bankers.
That was a great explanation... ruined at the end by the "we're all to blame, it's really humanity that is the problem, kumbaya" bullshit. People who got misty-eyed about the American dream of home ownership, and had their hopes exploited, are NOT EVEN CLOSE to as "at fault" as the licensed financial professionals who knew that they were lying to the world about the safety of these loans and securities. Don't equivocate, it makes you sound biased on behalf of the exploiters and con artists that infest our financial system.
The Problem is our People have so much pride and put their trust in A Plutocratic Ideology indoctrinated by Fascism. While they bury themselves in debt to chase consumerism, Sheep to the corporate overlords Praising Oligarchy as if it is the solution to all their problems, The Rich aren't to be worshiped and aren't to be praised, Reaganomics isn't the greatest thing that's ever happened and supporting the idea that the rich are the smart and the poor are the dumb is nothing but a targeted Parasitism to the poor. More and more of our leaders and of the last decade where born with their financial security. It's all basically Inverted Totalitarianism. The Ones who are speaking the loudest about all this are the ones who can afford to speak loudly in this commodified world we live in today and that's exactly what this "Elite" Chooses. Selfishness will be the end of this country and so will this two Party struggle, and super Corporations which pay less then 1% of their taxes; None of this is working and the people of America have absolutely no control over it Because we are too blinded by Consumerism.
If the American dream was buying a house you don't have money for and two cars you don't have money for to raise 2 kids you can send to a college you don't have money for, then it's a stupid dream. Everyone wants to borrow everything. It was partly our fault. Greed and envy all the way top to bottom. Good drivers in small amounts but a real problem if left unchecked.
We will never see pre-Great Depression or even pre-2008 levels of stability for the rest of time. The predatory bankers/investors/lenders should've been made an example of and jailed, or worse (but hindsight is obviously 20/20).
Wow! Great job skipping the fact that the federal government promised to back these sub prime mortgages, and that federal reserve artificially lowered the interest rates which sent false signals to borrowers.
Excellent video!!!! This is definitely one of the best videos out there for anyone wanting to learn about the Financial Crisis that took place in 2008.
One point that you didn't mention is that the rating agencies that gave high rating to these bad investments are mandatory for all banks. It's literally illegal for a bank to get third party advice on what investments should be rated at. So even if people figured out this problem beforehand the banks weren't allowed to use their rating.
I guess the lesson here is we all need to be patient and save until we can actually buy a property, and only spend money which we have already actually earned.
I feel like this is basically impossible in this day and age. Nobody would be able to afford a house without a mortgage. I know that in some cultures, they eschew debt of any kind so much that they will live in a house with several different families so that they can pay in full cash for the house and not have a mortgage. But that's not the standard of living most of us have gotten used to in North America and it seems like a tough lifestyle. Besides, this financial crisis screwed everybody over, every American tax payer had to help bail out the banks and not just the people directly involved in the bad loans, so I don't even know if that would solve a similar problem in the future.
if only that was possible...modern society has only gotten so far due to the ideaof credit and investing in something that doesn't yet exist but obviously it's not very stable, and we can't get by without anymore
The lesson is never spend more than 33% of your income on housing, never take a subprime adjustable loan (ie. never take an adjustable interest rate). It's ok to use credit, but not for consumption. It's pretty much impossible to live without credit utilization, and it's not even smart to do it. Watch the interest rates, keep them low, keep your credit score high. And watch your leverage (your level of debt compared to assets, income).
I'm an economist and the perspective of your explanation, from my point of view, is wrong. You ignore the role of the State lowing the interest rate, allowing to monetize the rise of house prices, pushing forward the "American dream", the role of the FED and the banks like Freddie Mac & Fannie Mae.
well! done! fact is that an economist from this perspective was who predicts the crisis. Fact is that I'm able to do models and so on, so I'm able to satisfy your view of an economist. Check this out: /watch?v=ksiHXSyQssI
Ramón BS Getting into a car and immediately shouting "ITS GONNA CRASH! ITS GONNA CRASH! JUST YOU WAIT AND SEE! IT'S GONNA CRASH!" every five seconds, doesn't make you good at prediction. Austrian economists are always predicting crashes. You can't go a day without some Austrian economist going "The crash is coming any day now!", and when the economy takes a dip, they go "SEE?! I WAS RIGHT!", despite 99.9% of their predictions being absolutely wrong.
+TheBreezyTrousers Very true BreezyTrousers. I have lost a substantial amount of money by mistakenly reading sites like ZeroHedge and Business Insider and believing what I read. I learned how to short the market and took advise from documentaries and these sites that said the market was going to crash and to buy gold. I now am in debt and I have lost $35,000 over the past 4 years and the market goes up consistently month after month. It is all a scam. I now just do the opposite of what documentaries, youtube, Business Insider, & ZeroHedge say to do. That is the surest way to make money nowadays. The internet is a breeding ground for idiots and people who speak what they don't know first hand.
Thank you for this! I was 11 or 12 when it happened so I didn’t really know much, if anything. There’s a common factor in all of this: Greed and Big Companies. Corruption.
>People saying how we are just printing financial problems away >But Greece is unable to get out from under its debts because it can't print the debt away ITS A CATCH 22 HERE.
You guys did a really good job explaining the 2008 Financial crisis. So glad that you took a balanced approach to the subject and also mentioned the Moral Hazards that were in place in order to make the crisis a reality. Something that is often overlooked when people talk about the crisis. Speaking of moral hazards, could you make a video on the possible implications of 0% interest rate?
I was working for a small UK bank then. I remember the CEO buying loads of packaged sub prime mortgages prior to the crash and bragging about what good deals he'd got. Then the crash happened. The CEO went off sick never to be seen again. The bank was nationalised in an emergency by the government and the parts of the bank that were okay sold to other bigger banks. Pity this course isn't updated for the current situation then you could cover the pandemic its aftermath, the Ukraine war and the energy crises. It energy and food costs continue to rise we will really be going round with crossbows stealing our neighbours gasoline.
I remember when this happened I'm not sure why but it didn't really change our lives at all. We were middle class barely but nothing really changed. I remember just watching all of this happen to others
hahaha "government provided emergency loans to protect fundamentaly sound banks from collapsing" If banks are so fundamentaly sound why do they need a bail out every decade? "Real wealth, of course, consists in what is produced and consumed: the food we eat, the clothes we wear, the houses we live in." -Henry Hazlitt
This just sounds like a whole lot of greed, and at the same time the banks knew that the government would have to step in and fix it for them if their subprime mortgage loans didn't work out. greed greed greed
Thanks for providing videos like these. Economic theory is something I have a very low grasp on, and these videos help explain the concepts that even an idiot like myself can understand. I really like the concept of adding references, and further reading, into the comments. I hope that becomes the norm for future videos.
I've always thought that, instead of bailing out the banks, the government should have bailed out the actual mortgagees who were taken advantage of through these predatory adjustable interest rates. Then, even if some of our largest financial institutions failed, at least we'd have made a move to combat the huge homelessness and racial segregation problems in America.
Hmmm strange. No mention of Hyman Minsky. The guy who predicted Financial Crises. They laughed at him but he knew he was right, he was indeed right in the end.
This was a very good explanation of the collapse. When it hit I went from making $140k annually, to literally $25k annually OVER NIGHT! I was and still am in concrete construction
I really like Adriene's approach and speaking style, (honestly probably more than Jacob's,) but I did notice she had a very large percentage of this episode.
This topic was on PBS some 13 years before 2008. The show was 'Newton's Apple'. The topic revolved around the exodus of scientific and math professionals in 1991 from the collapsed Soviet Union to the United States financial sector, and the formation of new complicated algorithm based metrics called derivatives.
I was 8 when this happened and had no idea what was going on I can’t imagine what my dad must’ve felt when me and my brother would ask him if he could buy us Pokémon diamond and pearl each
"The fault ... is not in our stars, but in ourselves..." -William Shakespeare, Julius Caesar This CrashCourse is co-executive produced by John Green, author of ... The Fault In Our Stars. Well played.
I remember in November of 2008, i was 14 years old when i saw the terrible look on my dads face when he said we were loosing our beautiful home. We had to move to some horrible house that had mold, dirty carpets, and no central heating or ac. My dad had lost his job and was struggling to have food on the table. I felt useless/helpless becuase i couldnt do much to help, It was very tough but in the end we survived. All of this just made me realize how much of a hard worker my dad was, he never gave up. Now im 22 years old and we have our own business now, and a beautiful home
"History doesn't repeat itself, but it often rhymes"
- Mark Twain
I thought it was George Lucas. Something about poetry...
Thank you I had never heard this quote before I really love it ❤️
I was 9 years old in 2008, and my father worked for AIG. My recollection of it was that my dad and I were at a local restaurant and he was reading a newspaper (an actual paper, ye yungins) and he just told me "Nate, we have made a mistake."
I was 7 in 2008 and my mom and my siblings moved to Mexico which is where my mom is from and moved with family there for about 8 months due to this crisis. My dad had to stay at the home we left and hard to work a tough job as a truck driver. We later moved back when my dad gave us the OK
My family lost 20 million my auntie 5mil dad 5mil grandparents 10mil
I was the same age. In my country it was felt differently but I remember that I was always asking for the cheapest ice cream, thinking that was the way to help my family budget :))
I was 12 in 2008, my dad was an electrician and my mom a maid. Both lost their jobs and we had to survive off of 300 dollars a month and stale church hand outs. It was like that for 2 years, horrible times
I was 11. My country was thankfully a lot less affected by the crisis than most other countries so I barely felt its impact in my everyday life, but they were talking about it a lot on TV so one day I decided to ask my dad why is there a financial crisis and it went like this:
Him: "There are some business people who borrowed money they can't return"
Me: "So why did they borrow it?"
Him: "Because they thought they could give it back"
Me: "So weren't they too irresponsible?"
Dad: "Yes"
Me: "But dad, why are people like that?"
Dad: (pause) "Son, now you can finally realize what type of people await when you grow up"
I'm 21, and this was one of the greatest life lessons I learned yet
And we, the hardworking taxpayers, bailed the bankers out so they could go on giving themselves tens of millions of dollars in bonuses and living in luxury on their private islands.
“Put down your crossbows”
Yeah right, then you’ll attack me with your crossbow.
Lmao 🤣🤣
Hagrid rarely put down his crossbow... but he just straight up broke it lol
So it's basically because the financial industry turned the economy into a Monopoly game played inside a casino. Amazing.
exactly
Who’s here during the great crash of 2020?
Vinista 🤚
woot
lol u already named it!
👋🏿
Not me.
"And eventually, they just blaimed immigrants and poor people, and this time even teachers"
best movie
Great movie it was.
Actually nobody blamed immigrants or teachers.
@@Big-guy1981 it's in the film
@@mrthugamer7603 at the time of these events I didn't see anything in the news blaming immigrants and teachers. But if it's in a film it must be true.
I was 8 when the crash happened, so I was blissfully unaware of what was going on. Now learning about what happened and having recent experience with loans, it sounds absolutely absurd for banks to give out credit without checking proof of income. Like I audibly screeched when adriene said that.
Who else is here because your business teacher didn't explain anything
I was taught in the mid 1980's in High school to NEVER get a loan that was not a fixed rate. If more people knew this, this would of never happened.
Same
@@seeDiersoilcrossrowds my thoughts exactly. You'd be surprised how many people stuck themselves with ARMs or balloon loans, and then call and complain that the rate went up, or that they found out about the balloon payment when they most likely failed to read the mortgage note.
seeDiersoil crossrowds; To be fair, the professor TRIED to explain.
And this is in the final exam😭💔
I can't wait for the Crash Course Economics episode of the impending "Student Loan Debt Bubble"!
better grab your popcorn!!!
We just hit 1.5 Trillion, this will be interesting
mort debt 15 trillion, CC debt 1 trillion student loan debt 1.5 trillion. most of the money circulation is bank credit. Loans create deposits economy expands, loans paid back economy contracts. The problem is bank credit. The solution is deficit spending.
It’s about to happen!
3 years later still no Student Loan Debt Bubble.
The reason is... You owe the government and the government, always ALWAYS will get their money from you. You can never default or call bankruptcy.
I used to be a large format printer. The firm I worked for printed blueprints and our bread and butter was home builders. When the crash hit nobody was building new houses. My firm was hit hard and even though we switched over to more school and hospital plans I got laid off in the 3rd round of layoffs. The firm went from 200 employees to 80 in 6 months. That was the best paying job I ever had.
The Big Short was a great documentary of exactly who the players were and what happened (mostly behind the scenes), but this "Crash Course" was really good at giving an overview.
My first year of college was 2008. My dad worked in the auto industry. My mom was a realtor. Talk about the worst situation at the time. Ended up having to join the Army to get some reliable income and put myself through school. Ended up being a great decision but man that was a tough time.
I was 8 in 2008, and I remember my dad putting up our house for sale and it being sold right before the crash in 2008. We were extremely lucky quiet honestly, it really pisses me off that so many were hurt because of these financial company's and banks who were a little too big for there briches.
Kyrsten Carlson back in 2009 I had a friend told me that her father was having heart problems. I asked why is that? Because Chase Bank was going to close their home.
Thumbs up if you came to this after watching The Big Short
I have a test on this thank you
Yep
I came before watching
What is that movie about
@@jessicapineda117 financial math hookers and superstars explaining recession and how buying houses works. ( heh i geuss i retained some information).
My parents got lucky. Back in early 2008 just before the crash my parents had gotten a house with two mortgages. Fast forward two years and one of the banks went belly up and the first mortgage was forgiven so my parents ended up with half the payment and an a suddenly huge equity in the house. We had also started our own business and barely managed to get by. Looking back I can't believe we survived it!
Oh wait, we survived the 2008 Financial Crisis?
Please excuse me, i need to return to my secret lair, grab all the weapons and ammo that I have been stockpiling for a revolution, and sell all that crap to make some money back.
+Achillez It has indeed been ongoing with like 4 if not 5 by now, federal loans over the years since 2008. Which makes the economy artificially recovering, and the feds are just printing money, so after a couple of more government loans, and we will be worst of then 2008.
+Achillez godammit it's asholes like you who are crashing the weapons market
+OMGltsFred I don't think so. The reason is the exponentially increasing nature of economies. Currently all the wealth of that exponential increase accrues to a very few really wealthy institutions, and not to most workers. This makes it seem like the economy is failing. In truth, the economy has continued to grow at the historical mean of ~ 3-4% annually. This means global wealth doubles about every fourteen years, as it is on track to do now. In 2022, the Dow will have a value of about 20,000, double what it was before the crash of 2008. The Fed printing money is just a way to pay for current projects - like maintaining the fiscal health of our civilization - by borrowing from future productivity. The reason this works is that the future is way richer than the present, and current debt will be worth half what it is now in fourteen years.
Josh Bobst Interesting, so when would you souppose the dept will decrease? Isn't this logic you presented, going to keep going, becuase "the future will be richer" so that justifies increasing a debt increase for all eternity?
+OMGltsFred We'll probably see a debt decrease when changes in taxes and economic growth occur. For instance, CO2 emissions taxes and tariffs have the potential to add revenue streams, without directly taxing citizens. New technologies in particular have the potential to create economic growth, as they become new exports, improve existing industries, or both.
However, all this assumes the government doesn't pursue greater spending when they are no longer faced with collapse from debt. In some ways, debt is acceptable and even advantageous -- provided lender confidence is strong. This is what makes the government shutdown more dangerous than high debt, because it undermines lender confidence and threatens debt management with potential austerity measures.
I was 7 when that happened. Our bubbling growing town suddenly became a ghost town. My dad’s busy company became a 1 man army and he was suddenly home a lot more. Then we moved to a different state and my parents lost the house. My family went from comfortable middle class to almost homeless a few times. Nowadays, my parents has their company again and are looking at getting house finally
"How an Economy Grows and Why It Crashes" is a must read.
"Things got better..." no they didn't, they just got pushed down the road
They actually did get somewhat better thanks to legislation like Dodd-Frank. Too bad it's been gutted.
"Money Printing Press goes bbbrrrrrrr......."
Sadly the so-called "experts" in the industry mistake "getting better" for "making it someone else's problem". What happened in the crisis? I'll tell you what happened. The US entered 2008 fiscal year with a national debt of about $9 trillion. At about the end of 2009 when the crisis was "over" it stood at about $12 trillion. Thus, the so-called "got better" actually just means they made $3 trillion in national debt to bail out the big financial institutions who caused the issue in the first place, thereby increasing the general public's future tax obligations of paying back the price of the bailouts. Literally all they did was punish the very group of people who fell victim to the crisis in the first place and rewarded the very group that caused the meltdown. That is the problem the world has. It rewards the elite and punishes the middle class. It will happen with the current coronavirus induced crisis as well. But make no mistake, the crisis is not BECAUSE of coronavirus. It is because of GOVERNMENT's RESPONSE to the coronavirus.
@@marcellenel3569 How did the big financial institutions cause the crisis?
The government started the problem by making it illegal to build on much of the land in California, driving up the value of the existing land to inflated prices, limiting homeownership. In order to fulfill their campaign to make it so every American can own a home, the democrats forced the banks to make bad loans by dragging them into court for not giving loans to poor people and minorities. The banks had to create some stupid loans that these people could actually afford, and then they passed the mortgages onto the government-sponsored Fannie Mae and Freddie Mac. When the people didn't pay their mortgages, the value of the securities vanished. So the fed hit the printing press to fix the problem.
I'm 13 and recently I have just watched the movie "Too Big Short", because of my ignorance; naturally, a lot of economic terms did not make sense to my understanding, but by watching this short video representation of the 2008 Financial disaster, I have finally understood most of the terms.
Thanks a lot, guys!
The big short explained it way better than this, investment bankers are scum bags and hopefully that movie helped open people's eyes, also credit default swaps are higher now than they were in 2008 so I think we are in for some fun
+Yuan Yu God dame 13, so you wasn't on UA-cam back in 2006
I'm 13 and I understand this too
The movie just out, "The Big Short" does a fantastic job of showing what went on with this, even providing some clever illustrations to help define/explain the more technical sounding stuff. Brilliant direction and acting make it a must see for someone curious about this calamitous event.
Very nice explanation of what happened. We were heavy in mortgage sales and we lived The Big Short from the ground level. I can remember talking with my wife in 2005 and 2006 about how much of a ponzi scheme the housing market was. Janitors making $60K were getting interest only loans and living in $245K homes. Shouldn't be. It was an insane time to be at ground zero of the crisis to come.
i was in first grade at this time, and i remember a bunch of kids leaving my school around this time and i didn’t know why. i later realized that they couldn’t afford tuition and it makes me feel so bad for them looking back
Moment I started HS in 2008, was the beginning of a very difficult chapter of my life.
I first noticed it when a lot of my favorite small businesses were closing at a rapid rate.
Almost 10 years later it feels like a repeat but with new closing settings.
#ThinkingOutLoud
I've been fascinated with the research on the 2008 crisis. Been following Planet Money from NPR since 2009 and they often go back to it with new information relating to places around the world.
SAME
I barely remember the crisis
+SirCrest NPR.... jesus f***ing christ...
+ian turner :\ Planet Money is a podcast though not on the Radio. It's pretty separate from the network. I would really recommend it. Has some great episodes analyzing all sorts of markets and industries over the world.
But if you hate NPR then I suppose I can't sway you.
+SirCrest Agreed. Planet Money is REALLY good. -stan
Here comes the productive, interesting and nuanced internet discussion! Oh wait...
+Menko We can dream.
+Menko A self-fulfilling comment...
+Menko productivity is determined by expectations. if you only want to have a discussion to agree with other people, you must be new to the internet...the internet is a fiery crucible where ideas clash.
+Menko People in UA-cam comments are only there because they're not being productive. Or doing anything interesting...
+CarlyleA999 Hey! I resemble that remark! (Really; I have nothing better to do)
Whenever I think of 2008 I just think of how much I love my mom and dad. We survived by selling homemade cheesecakes! I'm so proud to be their son.
Anyone watched "The Big Short" ?
yep., next thing i wanna watch is this dude using a van hallen belt buckle or even pantera
Not yet haha
In my top 5 favorite movies
You should also check out Margin Call
It was a great film. I don't know how they managed to make me empathise with characters that benefit from the suffering of millions tho!!!
Had to watch this when there was like 35 minutes left in The Big Short.
im watching that now. Had to pause it to research it so i could understand it better :)
same here :)
lol me too I realized I was lost af from the beginning 'cause I never really completely understand the recession
hahahahhaa exactly why im here
THANK YOU!!!! Im glad someone said it!
0:44 No, YOU survived it. I can't even afford a decent crossbow.
Crossbow? You one of those fuel-loving Mad Max road warriors he mentioned?
R3Testa yet you have a device capable of accessing UA-cam
@@4-CQL Impoverished Nigerians claiming to be princes, and pretending to be hot girls on tinder have access too. Doesnt mean they can farm or hunt food.
@@olivercuenca4109 You got a problem with road warrior-ing? 🤨
Sorry to inform you cupcake, but that's *your* fault.
Mortgages: you might already know what that means
Me: yes, yes I learned from monopoly
Who's ready for 2020: The Great Recession Electric Boogloo?
So it seems you are woke too. We deserve jobs when that happens, more so than anyone in Wall Street or the Fed.
@@hschsc1300 i agree. Keep in mind the most billionaires were made after the Great Depression.
If Trump doesn't get reelected we're all screwed . I'll never vote democrat again .
2023 is my guess. In November.
some one can explain this pls????
I was about 7 years old when the market crash happened, my mom and dad had JUST bought a home after it happened for 90,000$ our home is now worth 550k!
it was a big game of pass the bomb and there were too many that couldn't be defused.
Alright which of you cheapskates didn't buy a defuse kit?
You're being way too easy on the banks. They were manipulating this. The banks were the traders and the lenders. It was a conflict of interest.
You are very uneducated on this topic aren't you.
Correction. Government backed by Wall-Street is who Manipulated this staring with Bill Clinton's home affordability dream. His dream came from being in bed and getting paid by Wall-Street investors that put money in his pockets in exchange for Subprime Lending which these investors invested in and made a killing from.
You are blaming the wrong people. It started with the Fair Housing Act of 1968 and Freddie Mac and Fannie Mae, further back, The Federal Reserve Act of 1913, Quantitative Easing caused this as well. The Banks were forced to lend out Subprime Loans, and as a result it caused a housing bubble, and killed the Automotive and Banking Industry, which led to the failsafe, the Bailout. Thus we repeat this sad cycle of detrimental regulatory laws that cause our people to suffer as a result. We live in a Corporatist society now, not a Capitalist one, the large Corporations are just too big to fail.
Liberty At Its Finest thats very intresting. i didnt know/think for a second that the bank had to lend out subprime loans. so your saying they were forced to, because of quantitative easing? what is quatitative easing?
You know who was manipulating this? I have friends who know people who took out mortgages in order to buy more houses because of the housing boom. They repeated this and they "earned" a LOT of money and "owned" a bunch of houses. Of course we hate those we can't relate to. The truth of the matter is; people thought they could use the housing bubble to get rich and they gobbled up lending funds like it's theirs. Everybody tried to find a way to take advantage of the bubble while offloading risk to somebody else.
Failed to regulate? more like deliberately deregulated..
@ That makes no sense. Let's put this into play. You're a multinational bank. Who do you choose to loan to, the college student who isn't even interested in paying off his principle and consistently fails to pay bills, or a wealthy entrepreneur who has a solid business plan and years of experience?
In what reality does a business give their assets to people who will lose them? That's not how that works.
@ The government incentivised the risky loans that lead to the financial crisis. They provided very low interest rates, guaranteed loans, and required banks to provide loans to low income neighborhoods in return for larger loans.
@@aneyeforcapitalism6531 now who doesn't benefit from highsight, I mean of course we can look back and say man those types of risky loans don't make a lick of sense.... Which you're correct. However that was the thought process as the loans themselves were the product... If we're listening the mortgages we're being sold from bank to banks.... That's why they though of loosening the standards for loans .... See
@ a pattern is a pattern. It's not 'edgy' it's standard knowledge to anyone who isn't a government and banker apologist. The reason the banks did not care is because they knew they would be bailed out. This was deliberate and banks will continue to do this in other markets and destabilise our economy, now with ETFs for example. Crashes are a profitable part of the cycle for these people.
James D The Clinton administration signed the repeal of the Graham Leach Bliley Act, a depression era law that kept savings banks and investment banks separated. Once savings banks could become wide scale investment speculators, everyone’s savings were on the line, invested in CDOs and MBSs. The savings banks would never have approved the risky, ridiculous mortgages that they were motivated to approve once they had an investment arm that could profit from the sale of those same mortgages.
your ability to break down economics for the average Joe and Jane to understand is top notch. You really need to create a course on trading stocks for the retail investors. Thanks for all this great content and information. Lastly get those likes up folks and share this video
I wouldn't say "things got better" I would say "things were covered up" , or at best, "patched up", great explanation though, thanks.
I learned in 11 minutes what the last 8 years of explanations from the media completely failed to do. Thanks Crash Course (^_^)
Peter Schiff warned long before the crisis. There are many videos from 2006 to 2008 with people laughing on him. He was right at the end.
+Diego Sales Peter Schiff predicted nine of the last three financial crisises. His abysmal record, never-varying predictions, and complete failure to grasp the actual mechanisms of the crisis argue against giving him too much credit. Dude has no idea what he's talking about.
Happy someone is pointing out Schiff. Hes a smart man and has been right many times including Fed interest rates. The commenter above me is a tard
+Robert Richter Nice meme bro. You should try the stopped clock one too, I hear it's very popular with other people going around preaching the infallibility of the state.
+Robert Richter What abysmal record would that be? And why not demonstrate for us his failure to grasp the 'actual' mechanisms?
Prodigal Bard The abysmal record of constantly predicting crises that never happened before finally predicting one that (only sort of) did. And then there's his record since the crisis of predicting runaway inflation any day now -- which still hasn't happened after half a decade.
As far as his failure to grasp the actual mechanisms? He predicted the wrong crisis. He got the collapse of the housing bubble more or less right, but he's gotten everything else since wrong. People have lost a lot of money following his financial advice.
I'm astounded that I just listened to an 11 minute video about the "financial crisis" and not one mention of Fannie Mae, Freddie Mac, The Federal Housing Administration, or Ginnie Mae. Well in excess of 90% of all home mortgages are either written or guaranteed by THE GOVERNMENT. Who is the real enabler of the crisis??? And contrary to the impression you gave at the beginning of this video, "things got better" only due to the fact that the Federal Reserve took unprecedented steps to kick the can down the road. Nothing was solved; it was only postponed. Have you noticed where interest rates have been for the last six years? When the next "official" recession takes hold, we'll see how "fixed" things really are.
+watcherjohnny My thoughts exactly.
+watcherjohnny Unfortunatly, while this is a popular idea in some circles, it never panned out in actual analysis of the collapse. It was an element yes, but its impact was really minor. But it is repeated in libertarian circles so often that many take it as truth.
agreed. our government has the "midas touch ". everything it gets involved with turns into a muffler. lol
+neeneko Could you please provide a link to the analysis that supports your claim ? I'd be most interested to read it.
+neeneko May I refer you to this brief article that highlights the enabling effects these institutions provided in "the housing bubble": www.washingtonsblog.com/2010/10/christopher-whalen-freddie-and-fannie-helped-to-create-epidemic-of-mortgage-fraud.html
My brain just exploded from excitement !!! Mr. Cifford and Crash Course together ???? MY DAY IS MADE
The 2008 GFC was the main reason I decided to study Economics and Law at University the same year.
And how did your life turn out ?
leonard u I’m a lawyer now. My life turned out pretty good lol
@@MademoiselleNoonie Good to know
I was in 8th grade when the financial crisis happened, so now it makes sense why I kept seeing homes being foreclosed and why my little 13 yr old self felt like the gov't was being terrible.
"The fault lies not in the stars, but in us."
+Ben Aaron
"The fault in OUR stars" - John Green... Maybe that's where he got the title!
+♫Epicsauce4000♫ That was my thought exactly. I'm sure that's true! :o)
+Ben Aaron Pretty sure the fault lies both in us and the stars #natureandnurture
+Ben Aaron That is personally my favorite Julius Caesar quote.
AlliArt15 neat-o
So basically we have not learned from the Great Depression
+Abe It's not that we didn't learn, it's that we forget entirely too quickly. We need an elf or something really long lived to constantly remind us, "hey, don't do that stupid thing again. It was bad."
Because History class isn't doing it.
+Abe It's not that we didn't learn, it's that we forget entirely too quickly. We need an elf or something really long lived to constantly remind us, "hey, don't do that stupid thing again. It was bad."
Because History class isn't doing it.
+Abe Rather, we forgot everything we had learned, and grew complacent. Pride goeth before a fall and all that.
Check out the film Inside Job. One of the biggest factors in this was the repeal of regulation laws that were created after the great depression. We did learn, but the people involved basically bought the law and did what they want.
+kalibos you should watch koch brothers exposed doc. Many great organizations are trying to overturn citizens united, along with ridding the influence of money on our politicians. Never going to happen unless people starting voting more than every 4 years
Who's here just because they wanted to learn about the recession? I haven't watched the big short and I dont study buisness/economics.
Me
Ok
Me too
Yup. Same here
Why not watch it?
The teachings on this channel are always top notch so informative and easy to understand, it's very hard to find good content online these days
"The Fault in Our Stars" Hrmmmm... I bet that would make a good title for a book.
CrashCourse can you do a speculation video on what will happen if the College Debt bubble popped? Cause you know we have a lot of student loan debt
Gumer Zambrano it will pop. All bubbles pop. And it’s already been securitized just like mortgages were, and that is why tuition prices are rising so much faster than the value of a degree.
@@robinsonkaspar3395 well said.
@@robinsonkaspar3395 yet we haven't learned lol
More of the same will happen to be honest. Government will announce QE, print the dollar into oblivion, interest rates will drop, stimulus packages will be announced, laws will be passed to "seriously address the issue" and then we will sit back and wait for inflation to kick in, people will lose jobs and homes, government will announce a "successful stopping of the crisis" and about 5 - 10 years later it will happen again in a different market. It's how it always goes.
My friend actually just wrote a letter to politicians outlining just how bad it's going to be for everyone when that thing pops and explaining why it's actually way smarter to just absorb that debt ("forgive") and see the boost in the GDP. It sounds counter intuitive at first but it's far far more stable to do.
some of my thoughts about the 2008 recession: It happened (partially at least) because of deregulation (repeal of Glass-Steagall, etc.). No one re-regulated the market, and DIDN'T solve the problem, which makes it worse, which leads to a bigger recession...or a depression?
the old adage
2008 happened because of a fraudulent debt based economy not deregulation. Ponzie schemes need stoped not regulated
Not true.
The Fed was injecting credit lowering the interest rate of mortgages-> "hey, interest rates are low let's invest". Big boom and afterwards a big bust.
Business investments and interest rates are not related. That is the empirical evidence. It might have an effect on business decisions but that is very small according to studies. You can rule out small interest rates and blame asset based credit. Which was encouraged by people like Alan Greenspan and the Bankers.
I love these people for the way they articulate lessons. They make it interesting and simple to understand such complex subjects, events and etc.
"The fault lies not in the stars..." Woah! John Green out for a day and these people hung his principles upside down!? ROFL...
That was a great explanation... ruined at the end by the "we're all to blame, it's really humanity that is the problem, kumbaya" bullshit. People who got misty-eyed about the American dream of home ownership, and had their hopes exploited, are NOT EVEN CLOSE to as "at fault" as the licensed financial professionals who knew that they were lying to the world about the safety of these loans and securities. Don't equivocate, it makes you sound biased on behalf of the exploiters and con artists that infest our financial system.
The individual actors within the banks who made the decisions that contributed to the problem are part of humanity too.
Libertarians protect them, blaming thr government instead
The Problem is our People have so much pride and put their trust in A Plutocratic Ideology indoctrinated by Fascism. While they bury themselves in debt to chase consumerism, Sheep to the corporate overlords Praising Oligarchy as if it is the solution to all their problems, The Rich aren't to be worshiped and aren't to be praised, Reaganomics isn't the greatest thing that's ever happened and supporting the idea that the rich are the smart and the poor are the dumb is nothing but a targeted Parasitism to the poor. More and more of our leaders and of the last decade where born with their financial security. It's all basically Inverted Totalitarianism. The Ones who are speaking the loudest about all this are the ones who can afford to speak loudly in this commodified world we live in today and that's exactly what this "Elite" Chooses. Selfishness will be the end of this country and so will this two Party struggle, and super Corporations which pay less then 1% of their taxes; None of this is working and the people of America have absolutely no control over it Because we are too blinded by Consumerism.
If the American dream was buying a house you don't have money for and two cars you don't have money for to raise 2 kids you can send to a college you don't have money for, then it's a stupid dream. Everyone wants to borrow everything. It was partly our fault. Greed and envy all the way top to bottom. Good drivers in small amounts but a real problem if left unchecked.
The people are just as much to be blamed. People got greedy
We will never see pre-Great Depression or even pre-2008 levels of stability for the rest of time. The predatory bankers/investors/lenders should've been made an example of and jailed, or worse (but hindsight is obviously 20/20).
Wow! Great job skipping the fact that the federal government promised to back these sub prime mortgages, and that federal reserve artificially lowered the interest rates which sent false signals to borrowers.
WHOA ! .........dude? you mean da feds was in on it too?!...........thats whicked awesome maaannnnnn ! (( fast times ridgement high voice lol ))
We never recovered from 2008 we just kicked the van down the road , this economy has been busted for a long time. Just one big bubble economy
Excellent video!!!! This is definitely one of the best videos out there for anyone wanting to learn about the Financial Crisis that took place in 2008.
One point that you didn't mention is that the rating agencies that gave high rating to these bad investments are mandatory for all banks. It's literally illegal for a bank to get third party advice on what investments should be rated at. So even if people figured out this problem beforehand the banks weren't allowed to use their rating.
I guess the lesson here is we all need to be patient and save until we can actually buy a property, and only spend money which we have already actually earned.
I feel like this is basically impossible in this day and age. Nobody would be able to afford a house without a mortgage. I know that in some cultures, they eschew debt of any kind so much that they will live in a house with several different families so that they can pay in full cash for the house and not have a mortgage. But that's not the standard of living most of us have gotten used to in North America and it seems like a tough lifestyle. Besides, this financial crisis screwed everybody over, every American tax payer had to help bail out the banks and not just the people directly involved in the bad loans, so I don't even know if that would solve a similar problem in the future.
if only that was possible...modern society has only gotten so far due to the ideaof credit and investing in something that doesn't yet exist but obviously it's not very stable, and we can't get by without anymore
No the lesson is small government. If the government wouldnt have backed up the banks, they would have never had the balls to do so.
The lesson is never spend more than 33% of your income on housing, never take a subprime adjustable loan (ie. never take an adjustable interest rate).
It's ok to use credit, but not for consumption. It's pretty much impossible to live without credit utilization, and it's not even smart to do it. Watch the interest rates, keep them low, keep your credit score high. And watch your leverage (your level of debt compared to assets, income).
Also that banks are ruthless and psychopathically-run institutions.
I'm an economist and the perspective of your explanation, from my point of view, is wrong. You ignore the role of the State lowing the interest rate, allowing to monetize the rise of house prices, pushing forward the "American dream", the role of the FED and the banks like Freddie Mac & Fannie Mae.
+Ramón BS Austrian economists aren't economists.
well! done! fact is that an economist from this perspective was who predicts the crisis. Fact is that I'm able to do models and so on, so I'm able to satisfy your view of an economist.
Check this out: /watch?v=ksiHXSyQssI
Ramón BS Getting into a car and immediately shouting "ITS GONNA CRASH! ITS GONNA CRASH! JUST YOU WAIT AND SEE! IT'S GONNA CRASH!" every five seconds, doesn't make you good at prediction.
Austrian economists are always predicting crashes. You can't go a day without some Austrian economist going "The crash is coming any day now!", and when the economy takes a dip, they go "SEE?! I WAS RIGHT!", despite 99.9% of their predictions being absolutely wrong.
... that an overstatement.
I'm not going to argue in an emotional way. Bye.
+TheBreezyTrousers Very true BreezyTrousers. I have lost a substantial amount of money by mistakenly reading sites like ZeroHedge and Business Insider and believing what I read. I learned how to short the market and took advise from documentaries and these sites that said the market was going to crash and to buy gold. I now am in debt and I have lost $35,000 over the past 4 years and the market goes up consistently month after month. It is all a scam. I now just do the opposite of what documentaries, youtube, Business Insider, & ZeroHedge say to do. That is the surest way to make money nowadays. The internet is a breeding ground for idiots and people who speak what they don't know first hand.
Thank you for this!
I was 11 or 12 when it happened so I didn’t really know much, if anything.
There’s a common factor in all of this:
Greed and Big Companies. Corruption.
Finally,someone who explain this in a understandable way
>People saying how we are just printing financial problems away
>But Greece is unable to get out from under its debts because it can't print the debt away
ITS A CATCH 22 HERE.
2019 economics be like: i still need qe, i feel so sick
2020's sharpening the axe
You guys did a really good job explaining the 2008 Financial crisis. So glad that you took a balanced approach to the subject and also mentioned the Moral Hazards that were in place in order to make the crisis a reality. Something that is often overlooked when people talk about the crisis. Speaking of moral hazards, could you make a video on the possible implications of 0% interest rate?
literally the best explanation of this crisis on YT.
I was working for a small UK bank then. I remember the CEO buying loads of packaged sub prime mortgages prior to the crash and bragging about what good deals he'd got. Then the crash happened. The CEO went off sick never to be seen again. The bank was nationalised in an emergency by the government and the parts of the bank that were okay sold to other bigger banks.
Pity this course isn't updated for the current situation then you could cover the pandemic its aftermath, the Ukraine war and the energy crises. It energy and food costs continue to rise we will really be going round with crossbows stealing our neighbours gasoline.
My dad worked for AIG in 2008 D:
That wasn't a good time for us.
WOOOOOOOO ITS HAPPENING AGAIN
Who is here because of the next crisis in 2022?
I remember when this happened I'm not sure why but it didn't really change our lives at all. We were middle class barely but nothing really changed. I remember just watching all of this happen to others
Hits different in 2022 🤪👌🏻
hahaha "government provided emergency loans to protect fundamentaly sound banks from collapsing" If banks are so fundamentaly sound why do they need a bail out every decade?
"Real wealth, of course, consists in what is produced and consumed: the food we eat, the clothes we wear, the houses we live in." -Henry Hazlitt
This just sounds like a whole lot of greed, and at the same time the banks knew that the government would have to step in and fix it for them if their subprime mortgage loans didn't work out. greed greed greed
Can't wait to watch the 2019 version!
Here.2020
Why are recessions always caused by banks
That was muuuuuch better video than the previous one, i could understand very well. The seriousness at the end surprised me.
Part two is coming next year
You where right a lot of people lost there jobs
Are you psychic
Naruto Uchiha No I’m just smart enough to predict the future based on trends
You just nailed it bruh
What a mess. I remember not being able to buy a car, but able buying a house with a ninja loan in 07 🤦♂️
Thanks for providing videos like these. Economic theory is something I have a very low grasp on, and these videos help explain the concepts that even an idiot like myself can understand.
I really like the concept of adding references, and further reading, into the comments. I hope that becomes the norm for future videos.
We survived the crisis until now 2022/23
@8:45 Perverse Incentive is what got Wells Fargo in trouble last year with signing people up for credit cards without their knowledge, HUUUGE lawsuit
It's so great to see Mr.Clifford in crash course!! I passed all my econ classes thanks to you.
I've always thought that, instead of bailing out the banks, the government should have bailed out the actual mortgagees who were taken advantage of through these predatory adjustable interest rates. Then, even if some of our largest financial institutions failed, at least we'd have made a move to combat the huge homelessness and racial segregation problems in America.
Imagine when they make this video about the 2020s crisis 😅
Hmmm strange. No mention of Hyman Minsky. The guy who predicted Financial Crises. They laughed at him but he knew he was right, he was indeed right in the end.
they laughed at him because his name is Hyman
This was a very good explanation of the collapse.
When it hit I went from making $140k annually, to literally $25k annually OVER NIGHT! I was and still am in concrete construction
I really like Adriene's approach and speaking style, (honestly probably more than Jacob's,) but I did notice she had a very large percentage of this episode.
had to come to this video while watching the big short. its a great film by the way, just like this video
Beautifully written and thoroughly explained. Love it.
Superbly easy way of explaining the 2008 FC, glad for this channel's existence!
This topic was on PBS some 13 years before 2008. The show was 'Newton's Apple'. The topic revolved around the exodus of scientific and math professionals in 1991 from the collapsed Soviet Union to the United States financial sector, and the formation of new complicated algorithm based metrics called derivatives.
I thought we learned our lesson with housing bubble during the 1997 asian financial crisis
Honestly, this is nothing new. It's a repeating pattern
Here before I watch the big short
Silicon Vally Bank brought me here.
I was 8 when this happened and had no idea what was going on I can’t imagine what my dad must’ve felt when me and my brother would ask him if he could buy us Pokémon diamond and pearl each
"The fault ... is not in our stars, but in ourselves..." -William Shakespeare, Julius Caesar
This CrashCourse is co-executive produced by John Green, author of ... The Fault In Our Stars.
Well played.
i like to call this a "stream snipe"