The HIDDEN Cause of ALL Recessions
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- Опубліковано 5 чер 2024
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We’re at it again. These are tough times.
It’s gotten so bad that it has even taken a toll on this and it’s a big deal.
In NYC, for decades, there was the pizza principle: where a slice of pizza was the same price as a subway ticket.
But not anymore. The decade-long balance is now gone.
The bad thing is that it’s much more than just pizza.
Global chaos, rampant inflation, and a looming financial crisis.
Crypto rose promised millions and then collapsed, taking people’s fortunes with it.
Startups are closing down, and thousands are losing their jobs.
Expensive pizza is the least of our problems.
The problem is that having something to eat, like a slice of pizza a miracle for some.
And a bigger question lingers: how do we end up in this sh*t in the first place? And, most importantly, who’s responsible?
Let’s talk about financial crises in this episode of Company Forensics.
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0:00 Financial Crises - Intro
1:27 Financial Crises- 1700
6:04 Financial Crises - 1929
16:52 Financial Crises - 2008
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You do realize this is exactly what was predestined in the Holy Bible, right? None of this is on accident. The Four Horsemen are with us, now.
We need to de-gamblify economy systematically. Individuality of individual level resistance to gambling is never gonna be enough. I don't know how would be best way to do it but we need to do it.
Couldn't even understand your pronunciation. The word is bAnks not benks.
@@matrixfull the evilites pull the plug when they choose to pull the plug. They cause recessions so they can buy at the bottom. Only the Evilites at the very top know when. They have to repeat the cycle! to multiply their money.
hi, just got your video recommended to me, and I noticed you repeatedly asked "why couldn't we see it coming ?" "why does it keep happening" ?
and it's true, to most people it's unpredictable, but it just so happens that we know why it happens, we know what is the reason it keeps happening and we know how to get rid of it, there's an interesting book you could probably read that was written in 1867, it's called "the capital" and explains this cycle in a way that might interest you
I foresee a recession lasting 2-3 years, and if inflation continues to surge, the Federal Reserve will likely raise interest rates soon. Inflation is causing various issues worldwide, such as food shortages, scarcities of diesel and heating fuel, and significant spikes in housing prices, leading to a potential financial market crash. This global downturn could have long-lasting repercussions. Given the current inflation rate of approximately 9%, my main worry is how to optimize my savings and retirement fund, which has remained stagnant at around $300,000, yielding almost no gains for quite some time.
Numerous opportunities exist to achieve substantial profits at present, but executing high-volume and nearly flawless trades requires the expertise of real-time professionals with an ISDA Agreement. This agreement allows investors to participate in sophisticated trades, exclusive to seasoned individuals, and unavailable to amateurs. Attempting to be a high-stakes trader without an ISDA is akin to trying to win the Indy 500 riding a llama.
I’m sure the idea of an invstment-Adviser might sound controversial to a few, but a new study by Motley-fool found out that demand for Financial-Advisers sky-rocketed by over 42% since the pandemic and based on firsthand encounter I can say for certain their skillsets are topnotch. I've accrued north of 580k within 16-months from an initially stagnant Portf0lio worth 85k.
Inflation is over 10% here in the UK, but as we know it's definitely way more than the Government would like to admit. My plan is to earn more passive income and ride this out, can your Investment-adviser assist?
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Marisa Michelle Litwinsky” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Interesting. I am on her site doing my due diligence. She seems proficient. I wrote her an email and scheduled a phone call.
Best peace of advice I ever received about wealth was in my early twenties. Here it is. "Building wealth, real wealth, is boring. It not fast and it's not difficult. It's being disciplined and living off less than what you earn, using the difference for a rainy day fund and investing in broad based mutual funds and/or index funds". It's a snooze fest and it's unsexy
And it WORKS!!!
@@ccgrider1014 it certainly does. I'm now in my 40s, I do not live paycheck to paycheck as so many others. A car repair is no reason for me to panic and have been able to help my kids with college.
@@dannyschwertner7785 Me too!!
That, or be in a very lucrative career or start a successful business, both of which require a huge amount of work. The point still stands - it’s not a free lunch.
@Manuel Castanon one needs to aquire a marketable skill and there are plenty of immigrants who come to us who do just that. Further, one needs to create margin in their budget. A full 1/3rd of Americans have a car payment and the payment is on avg $525 for a used vehicle. $525/ month invested in an s&p index fund for 20 years makes one a millionaire. Make moves or make excuses
Since we're approaching April, one of the best months to buy stocks. I am currently holding north of $300k in a savings account waiting to invest in another huge opportunity.. Where would you invest this as of now?
Look for stocks that have paid steady, increasing dividends for years (or decades), and have not cut their dividends even during recessions. Alternatively speaking to a certified market strategist can help with strategies to hedge losses
Agreed, my portfolio is well-matched for every market season yielding 85% from early last year to date. I and my advisr are working on a 7 figure ballpark goal, tho this could take another year. IMO, financial advisors are the most sought-after professionals after doctors.
Your CFP must be really good, I hope it's okay to inquire if you're still collaborating with the same CFP and how I can get in touch with them?
That would be Monica Shawn Marti. You should look her up, I say. To be honest, I almost didn't think I should, but I'm glad I decided to let someone handle growing my finances.
Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
I used to think everybody went broke during the Great Depression and other major crashes but they didn’t… Some made millions, I also thought everybody went out of business during these times but they didn’t, some went into business, there's always depression/recession for some people and there's always a good time for others, it's all about perspective. My primary concern is how to grow my reserve of $400k which has been sitting duck since forever with zero to no gains.
first step is discovering loopholes to generate gains during volatility, It is very possible to retire big time from the current market condition without having to hold stocks long term.
@@velayuthman Most of these strategies and loopholes are better managed by experts and pros, the average investors on the other hand are exposed to market sham which can lead to portfolio blunder. The issue is people always have the “I want to do it myself mentality” Unapologetically, that’s why they get heavily affected during a crash, most folks aren’t equipped enough to capitalize on drawdowns hence, its ideal to seek a portfolio-coach.
@@TeresaBrickle At first-hand encounter, I stay unbothered amidst crisis and even pull off profits easily in a bull market, coupled with the fact we’ve had the longest bullrun ever in U.S history before officially falling into a bear market this year June, been able to grow my portfolio from $170k to nearly $1m since late 2019 before the pandemic till date.
@@Shultz4334 To me, not evryone can afford a coach/advisor. I personally dabble in stocks and my first rule is survival before flipping for chunky gains! congrats however, your coach must be really good, mind if I check him out on my computer?
@@colleen.odegaard She's a lady, "HEATHER ANN CHRISTENSEN" is her name. I initially came across her on a CNBC report then on smart advisors and at once searched her on the internet, best decision I've made to stay afloat these crazy times. She's been exemplary.
I came to the US in 2003. Around that time and for a very few years, I saw some ads that were very confusing about getting a second mortgage to go on vacation or pay for credit card debt to access the "excess equity" in your house. I always found it very confusing that this kind of thing was being promoted.
It is still being promoted to this day. American culture is weird with debt. Somehow they think you need to find that edge where you can spend as much money as possible while having barely enough to pay the interest. One emergency is enough to topple them down.
@@Ferdinand208 Not all of us.
@@renegade382 Then you have more European genes in you so you don't plan yourself into a corner like the ones with less Euro-genes in you.
So did I. Usury as speculative financial instruments...Rabbai Alan Greenspan's gematrian economic tools, derivatives and fractional reserves sliced a baked bean many times garnished with a ground peppercorn. His Chabad friend Janet Yellen ? " ABORTION IS GOOD FOR THE ECONOMY! " Therefore? Invest in human sacrifice for Adrenochrome and body parts ...companies. Plasma companies. Harvesting humans . The word " Mortgage " ....Mort/ gage. Hey hey my my dear goyyim. The culprits are cultists men dressed like women.
I bought in 1995 and again in 2006. In 95 I needed a 20pc deposit and could borrow up to 3.5 times my salary. In 2006 it was 10pc and 4.5. And they offered me a bank loan for the 10pc. So a 100pc loan at a less favourable rate. Never mind that I basically couldn't afford the resulting monthly payments
The US economy is grappling with uncertainties, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.
Things are strange right now. The US dollar is becoming less valuable because of inflation, but it's getting stronger compared to other currencies and things like gold and property. People are turning to the dollar because they think it's safer. I'm worried about my retirement savings of about $420,000 losing value because of high inflation. Where else can we keep our money?
Well I recommend you make a diversification plan because it's been harder to build a good stocksportfolio since the pandemic. My colleague suggested I hire an Adviser, and I've actually made over $150K with their help during last market upheavel.
Having an investment advisor is the best way to go about the stock market right now. I was going solo, but it wasn't working. I’ve been in touch with an advisor for a while now, and just last year, I made over 80% capital growth minus dividends.
How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings
Melissa Rose Francks is the licensed fiduciary I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
American humorist and writer Mark Twain is frequently credited with the aphorism: “History doesn't repeat itself, but it often rhymes.” Which means, while details change, circumstances change, settings change, names change, similar events will essentially recycle.
I deeply question the names changing part. I feel it's much more likely that there is a very small group of people pulling the world's strings and they have been doing it for hundreds of years. (well their families so... I guess technically, the names do change)
Mark Twain lost most of the fortune he had made from writing, by investing in dumb inventions.
Things, money, more "things"... filling the void, being on the safe side at all and/or any cost. One day we might finally learn as a community that THIS is not what life is about, they are distractions, illusions in the best case, with a skin deep meaning. Until then we will continue to go through this cycles over, and over again or, until one of them finally beats us permanently.
I have considered that; if we solve energy scarcity, bring the costs of goods and services also down to nearly being free via automation, A.I., robotics, and mining resources in the solar system bringing the cost of resources down to nearly free, there would be little benefit to exploiting the masses, and everything to gain by empowering the masses so they can be highly educated, highly skilled, with a high satisfaction with the quality of their lives, as this would create the sort of environment that would reward society via many more artists, musicians, scientists, and even a greater number of those contributing to society on a more social level. I just can't decide if this much better scenario is more plausible than the dystopian future seen in many sci-fi stories. Things look pretty distopean in America right now; I just hope we can make the changes that can help us avoid becoming a distopean landscape in America or elsewhere around the globe.
I thought the Middle East or elsewhere had a higher chance of such a nightmare future; but sadly it looks like America will show the world how even a strong Democracy can fall into authoritarianism and fascism, when select individuals and the groups they belong to are able to grab political power.
Fed reserve and the treasury is not bothered about stock capital market. They are more concerned about the treasury bond market. They fear the bond market may become dysfunctional and illiquid. Bond yields are one of the important parameter that influences stock market. All stock pundits fail to mention how the bond yields influence stock market. My main concern now is how we are going to achieve all of that given that the market has been a mess for most of the year. I already lost $23,000
Building a good portfolio, which generates good returns, has been more complex since covid, so I would recommend that you seek professional support. This way, you can get strategies designed to address your unique long-term goals and financial dreams.
@@DanLeahfort Totally true, The market is definitely the most awkward teenager with the wildest mood swings. I started investing in 2020 and that same year I made a profit of over $758,000, and all I was doing was basically following the guidance of a portfolio advisor, she does all the hard work and I just copy.
@@GarrettDills KATHERINE DUFFY BURKE. She is one of the highest rated portfolio-advisors with a good track record. She is also verifiable through various advisory bodies. Lookup her fullname on the web
@@RachelBrinkmeier I searched for Katherine using her full name and found her webpage, read her resume, education, qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I sent a message and I hope she replies soon
Magic word: FTX .....Ask catherine about it.👍
Great video, but a couple minor corrections:
-The Dutch revolutionized finance, but they didn't invent the futures contract, we have records of futures being used as insurance and investment back to the code of Hammurabi in ancient Babylon
-The east India trading company was chartered by the British and is a separate entity to the Dutch west India company that was involved in the tulip bubble.
-Sub prime loans are those given to individuals with low credit scores at a higher than market rate to account for the added risk to the lender. Loans who's rates change to a higher rate at a later date (the definition given in the video) are referred to as balloon loans or teaser rate loans.
East India Company stole 45 Trillions from India by trains.
A balloon loan has a small monthly payments and a large payment at the end of the loan term. The mortgages that he and you are thinking of are ARMs, adjustable rate mortgages are mortgages that have a low interest rate for a 5-7 year period and then adjusts upwards every year after up to a certain cap.
@@narmortein537 and how that didn't destroy the British Empire? with a lot less the Spanish Empire suffered a crack that almost kills it
I can't get enough of your Company Forensics videos guys. I saw the quality of the content grow into excellence over time and never get boring.
The quality of the production, the stories, the knowledge, and the insights are just the perfect combo.
Awesome job guys! Really!
💜💜
I think I'll be watching a lot more of these videos.
I was getting my econ degree in the mid-2000s at Boise State and we were all talking about the upcoming housing crash. We saw it coming as early as 2006 and it was "just" a state university. Yale didn't see this coming, but we did. You got the story totally right. But there was more to it. There was also a racial component. In class we listened to a podcast interviewing people who'd recently worked at mortgage banks. The guys being interviewed were from a company that apparently targeted black homeowners with sub prime loans, knowing that the whole system was about to crash and and telling themselves that it was okay because it was black people getting screwed. Finance types are the worst.
Wow.
Everyone doing mortgage underwriting saw it as early as 2005, for reasons the video doesn't cover because they don't know what a subprime loan is.
See calculated risk for the writings of Tanta (RIP) if you want to know how it all went down.
Are there any numbers on how many black folks were affected?
Huh? This is BS. Stop being a crying victim. If I am a businessman, I don’t care what your color is. As long as I make profits, you can be any colors you want, even a rainbow.
So sick of this “black” made-up sh*t.
Some people did foresee the 2008 Crisis. Read Anne Pettifor "The Coming First World Debt Crisis", written in 2006. It's one of the most thought-provoking books I've ever read. She foresaw the 2008 economic crisis 2 years before it happened.
I think Aaron Clarey did too
I wrote TWICE to Lloyds bank in 2007 telling them that if they did not stop throwing money around like Confetti then the shit would hit the fan. Their answers were derisory, the rest is history.
Micheal Barry as well
More than two years, probably closer to four or five. She'd have to write the book and then find a publisher.
Steve Keen.
I think it was Willem Buiter who did a paper on the roughly 8 people who definitively predicted it.
Good points! I think a major part of the problem is that when someone figures it out they try to profit individually from it instead of raising alarm bells about the problem.
Michael Burry (one of the guys who the Big Short was written about) repeatedly tried to warn regulators and they just didnt care ahead of 2008. He was one of the first to spot the pattern. I dont fault him for profiting off of it. He didnt cause the problem.
@@Bigbudd0045 agreed!
People raise the alarm all the time because the system by design is unsustainable and will regularly lead to crashes...the problem is that most people don't want to listen so the system doesn't change
@@moritz7179 VERY good point! :)
Warren Buffett has mastered what patience looks like. He has stuck to the markets, having a long term view on the markets. This is what I'm struggling to do, trying to learn how to not react to market news about inflation and all. I have currently set aside about $553k to put in the market now that prices are down. Any ideas?
It takes some gut to really remain in the market despite downturns and all. So just find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
@@Aziz__0 I agree. I have pulled in more than $435k since 2020 through my advisor. It pays off more in the long run to just pick quality stocks and ride with those stocks.
@@corrySledd I've been looking for advisors recently because the market news hasn't been very positive. who’s the person that is guiding you.
@@Blitcliffe I work with "NICOLE DESIREE SIMON". I understand what it's like to see your portfolio going down. I hope the performance improves.
@@corrySledd Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
It's no mystery to me why history keeps repeating itself. I remember seeing people who went through bankruptcy and lost multiple houses in 2008, 2009, and 2010 immediately jump back into debt the first moment they could, and start the cycle all over again. Too many people just don't learn.
"those who don't learn from the past are bound to repeat it", Never a truer word.
History doesn't repeat itself. People repeat history.
There's a huge diff between going into a fixed rate 30yr mortgage on what you can afford (even though its debt) vs an ARM on a 3rd home. Smart responsible people do the former, dipshits do the later. Dont lump those together.
@@dereklinscott8488 I don't know who you think is doing any lumping. I'm pretty sure you're the only one talking about fixed-rate 30-year mortgages.
@@retroactiveIifestyle So your not? A 30 year fixed is 'jumping into debt' after all.
"It's a good thing most people don't know how our economic system works, because if they did there'd be a revolution by morning. - Henry Ford
Actually nobody really knows
Grasshoppers-Henry Ford fulfilled contracts for the Nazi Party in Germany for De Fuhrer. The Chase National Bank offered the American Nazi Nationals to buy marks with dollars at a discount after 1929. The US is now the largest clearinghouse for foreign investors, in US history. The banks only pay a fine for 'breaking bad', part of doing business, deregulation from the Reagan Era forward. Berkshire Hathaway is the leader in house flipping/bank foreclosures and assurance deals. It's common knowledge the first 5 years of homeownership, paying down the principle is the first goal, but there is no guarantee of employment with two incomes, either. Pensions have become a joke since 2008, more have gone into receiverships, mine was one. How many of you have taken Econ 101? Live below your means and within your seems.
As a major economics nerd & someone who works in Investment Banking, I have to say, this video was so excellently done & so perfectly explained.
*Bravo, I subscribed!*
🥲
Right?! As an economist I was a bit sceptical, but Damn! This video's good!
Economists are the new vegans. What else should we know about you?
@@JoelSalazarM 😂🤣
@@JoelSalazarM economics is simply the science of studying how the economy actual works. (Btw it's complicated) how can people who dedicate their lives to studying a specific part of society be a threat to you? Veganism is a tad more absurd. I for one argue that by examining our human teeth, etc; it is quite clear the proper diet is a balanced one. How the heck can vegans eat so much processed crap!?
But yeah, as per economists being a negative indicator to you... I suppose you don't like math? Well... I hope you dont play video games!
(Tbh UA-cam is thanks to computer science, economics is attempting to be money science)😎🖖
I love the way that you underlined that the problem is not the stock market, the real estate, this one, that one...The problem is our relation with education, with information, we put so much attention on things not so important but we don't put attention on things that affect our life! We know the last girlfriends of Pete Davidson but we don't know how the world works, who we are, our goals, how to reach them...
Great narative and great video! Keep up the good work🙏🏻
Yeah I remember when I came out about the strawman and how we're being taken advantage of through contracts and my parent didn't understand that but buying a 50,000 car and bragging to me about it is well within your capability. So.. yeah.
It was hard for us to learn anything back in 2008, because emotions were so high. There was so much finger-pointing, people were more focused on avoiding blame than actually taking steps to avoid the next crash. They just wanted to get back to the next boom and tell all their enemies that they were right all along. Our egos are the problem.
This would be an excellent point if not for the vast swathes of financial regulation that happened immediately following the crash
@@oldvlognewtricks the regulation that was passed was largely nothing more than window-dressing.
Human stupidity is as great as it has been since 2008.
Emotions were high because the left's dear leader was nothing but emotion, he was the god the left had been waiting for. That's all they had, but emotions are mighty powerful. So, what did the right do? Negative emotion, Donald Trump! He actually did some positive things for America that were 100% overshadowed by his ego.
It's not our egos. We were duped into thinking regulation is wrong. We should regulate and deincentivise speculative investments. Simple as that.
Reminds me of the quote. "I have met the enemy and it is us"...goes something like that.
I recall some American friends had a hat box. They used it to store a mound of preapproved credit cards that just turned up in the mail, unrequested. They were fiscally responsible, but I expect thousands were tempted to just go on a binge. Who should be blamed for such a ridiculous scenario?
Worse, in my opinion, is when credit card issuers go on campus to encourage students to open accounts. Students with minimum wage jobs, or no job.
Seems like a form of gambling in my opinion
@@annedonnellan6876 financial entrapment, I think
Those cards were for a rainy day.
congress. junk mail was mandated by congress as it generates huge tax revenues, so much so congress gives junk mail only a farthing of a cent stamp prices so junk mailers can send billions of mailers despite the post office having to spend full price on expenses.
I must be an oddball. I have not studied economics, finance in general. Not surprising, but what makes me a real oddball is the fact I actually listened to my parents, grandparents, aunts and uncles. They gave me a wealth of information on poverty (Great Depression) and the preservation of wealth. By listening to them, I was able to avoid the trap of "Get rich quick" and see the patterns of the early 1900s repeating again as early as the 1970s.
Anyone who doesn't study history is bound to repeat it.
You missed something about the tulips 🌷. It was the bulbs that people went crazy over betting if it was going to be a exotic looking tulip when it was grown in the spring. People bet on the bulbs and lost all of there money when it turned out to be regular tulips.
Same thing repeats in time with different materials. But it’s all just people wanting more out of life. Everyone wants more just don’t know how to get it. the stock market or gambling is one of the first things people go too to solve that problem.
People like to call it investing, but really most of them are just gambling.
@@yivunqp963 So true!
The stock market is a share from trade.
PSA: The tulip thing is a myth. A guy made it up. No historian has ever found evidence. The more you know.
It is surprising that the video doesn't mention the Glass-Stegall act of 1932 (and it hasn't been referenced in the comments either, so far). This was a legislative response to the excessive gambling that occurred and set up the conditions for the 1929 crash. Interestingly enough, this act was able to prevent major economic collapses right up until it was repealed in 1997. Removing these restrictions allowed the housing bubble to be created and, once again, we have a major collapse! A very weak and ineffective version of the original legislation was put back in, but it won't stop the next disaster.
I am first time hearing about this act and it sounds great
No mention of FDR era regulations at all. But then again I suppose this is a general critique of the responsibility of the general population's (our) part in all of it.
@F, Frost......Thank you for introducing....The Glass-stegall Act of 1932.
@@mikestaihr5183 Yes it's our fault, comrade! Totally not the central banks that control the economy!
Jeez, it almost seems to be done intentionally.
Very nice video. Weirdly I had a conversation with somebody I've known for 15 years about the coming recession just over half a year ago, he insisted that recessions and major stock market crashes were a thing of history, and only minor corrections would happen from now on. I was flabbergasted, how does thinking like this come up every time, that it's different this time?
Stop hanging out with idiots, problem solved
Haha! Gordon Brown, chancellor of the UK (Treasury Secretary in US, I believe) at the time of the 2008 crash, shortly before it claimed that their Labour party had 'put an end to boom and bust'. He was the CHANCELLOR and he made a statement like that on the eve of arguably the biggest 'bust' in history. We mere mortals don't stand a chance with the guesswork available to us. At our level, caution, moderation and scaling back aspirations (trying to be 'financially comfortable' rather than wanting to be crazy, 'Bezos' rich in a space of 5 years) are the keys.
This time actually is different. It will be so much worse of a recession than before, because the US has printed more money since 2020 than ever before.
Ignorance. We're technically in a recession. How bad will it be? Nobody knows.
@@rathelmmc3194 depends on the interest rates? We know the levels of debt and we know the levels of savings.
Great narrative, well done!
Let’s face it the base root is the human trait we can’t overcome: Greed, number one and gluttony, pride and jealousy in no particular order.
You have nailed it! Financial foolishness is generational, and it occurs about every 70 to 100 years depending on longevity. Grandfather is old and times have changed. His son sort of listens to him, and he is a little more careful. The grandson says to himself, "The old man and pops don't know jack. The good times will never end!" Then everything goes to you know where. This time it is going to be worldwide, but don't listen to me. I'm just an old man at 77 who listened to my grandfather and my father. This is why I retired at age 45, have a net worth of 2.5 million after giving a half million to my son and daughter, have no debts and make $120K a year after taxes for just breathing.
What about Envy ?
It's not greed it's speculation. If we blame it on greed we blame it on no one. We have no solutions. This video is bad because it goes "oh well I guess people were dumb". No. We deregulated markets which allowed for this to happen.
Speculation to enhance riches stems from greed.
Speculation is not the cause; it is the effect.
@@jamestown4867 but you can affect speculation. You can't affect greed. So unless you plan on mass brainwashing people it's pointless to talk about greeed.
No matter how many times crises happen, greed and fear are always there to make people blind
"...the culprit may be staring right back at us" - Caya
Thank you for being one of the few with the courage to publicly call this out. Pointing fingers is quite the trendy habit, but there's only one reflection in the mirror. 'Take some ownership' is such a refreshing message. Keep on SB team 🤘
YESSS! The perspectives of SB content is FRESH AF.
... personal responsibility in a system where most of the people are literally under educated as to the nature of the problem?
I mean preaching personal responsibility is nice... but the fact is most people don't actually KNOW the facts of why these systems collapse and thus literally cannot actually recognize the trap in order to avoid it.
Fact is, it's the people who sell this shit to people who are under educated who are the real issue. Because the people SELLING these margins always know the nature of them, and their USUAL customers are people who don't have the education to understand the scam for what it is.
Its the same as with any other pyramid scheme.
He isn't saying that the general public is responsible... he's saying that We as the ones who learn about this stuff... the people who are almost always in a position to leverage our understanding of it either to exploit or halt exploitation who have the responsibility to call it out where we see it rather than participate in it as fellow gamblers.
In plain straight forward plain English is the fact that investing money in stocks is that IT IS A FORM OF GAMBLING NOT DIFFERENT FROM THE REAL CASINO GAMBLING IN LAS VEGAS BUT ONLY THIS TIME IT IS NOT IN LAS VEGAS, IT IS IN WALL STREET.
Works well usually but not when you are sold downright lies. Some of these people like Bernie Madoff are excellent, charismatic, polished deceivers.
I majorly disagreed with that last one. I need a house, not for investment, but because I need a home to live. Rent + mortgages are tied together, we are forced to partake whether we like it or not.
I'll admit I just watched the video to see how close to the truth you'd be. You got it right as far as the economics behind it. Leverage kills. I'd add to that though, by saying the psychology behind over leveraging is greed. I'm most convinced now than ever that success in investing is found within my own mental discipline. Stay zero leveraged, control risks, be ready to buy after everyone sells. Hopefully we don't ruin our economy completely. That's the hardest risk to prepare for.
Never heard margin calls explained so easily, well done! Subscribing for future content!
Selfish fueled greed is the first and greatest fundamental economic cancer. I've worked in the financial industry since 1984. And I've seen this simple truth played out countless times: The borrower is slave to the lender.
The whole video tries to ignore the elephant in the room. In the tulip mania only people who were gambling got hit. In 2008 the whole world got hit. How is this possible? Shouldn't only the gamblers get hit? Normally yes. When the US government guarantees your mortgage there is no risk for the banks. If there is no risk you go all in. Everybody would. So speculators (not investors) push up the price until the bubble pops. But this time investors got hit because the government was gambling. And the pension funds thought the government wouldn't gamble with their money.
if you thought this video was interesting, please look up what really happened. If your only source is this video you know less than before you watched the video.
in what way was the govt gambling? it's the first time I hear of them guaranteeing mortgages. I do know that that is a factor in the current student loan bubble but I've genuinely not heard of this before in mortgages. Are you referring to the moral hazard encouraged by previous times the govt bailed out institutions caught up in mortgage related money issues, maybe?
@@owennilens8892 the government subsidised NINJA loans. A NINJA loan is a slang term for a loan extended to a borrower with little or no attempt by the lender to verify the applicant's ability to repay. It stands for "no income, no job, and no assets."
Normally banks would never take this risk because once house prices come down you go bankrupt because of the massive defaults. But because of the dot com bubble they wanted to fix it with a housing bubble. Let everybody who wants a mortgage get one. Once you have it you sell it to a subsidised company and you are risk free. The government was gambling that house prices only go up.
Bravo.. in-depth response and valid
Yes.
The shitty part is lack of skin in the game.
You get burned irrespective of your actions.
This has the 2nd order effect of effectively forcing one to speculate, exacerbating the issue.
What is more important is to follow the money one step further and look at what incentivises a country/government to do so.
Lobbying/interest groups.
A government doesn't actively seek to shoot itself in the foot.
The fiat system is the biggest pyramid scheme the world has ever seen. It's so big and complex that almost no one on this planet sees it. Learn about bitcoin, you'll learn about money in the process and you'll never see the world the same way
Dude! How cool is it to listen to an eco lesson from a guy with your hair and t-shirt and starting it all with pizza!! And btw the best telling of the tulip bubble I've ever heard AND this video was so damn well done! I can't wait to watch more. I am beyond impressed and yes, to answer Russel Crowe in "Gladiator" I am entertained!
Ah-ha! The slip that summarizes it all: gamble, er, invest. When people put money on a risk/possibility as if it were a reality. Futures, margins, leverages, speculation, etc. Lesson: don't gamble more than you can afford to lose. In my circle, we saw what was coming, but we did not have a voice to warn anyone/we were discounted.
A very nicely laid out explanation over all. Learned a bit more of history, too.
In NYC, subway fare costs $2.75. A pizza slice is about $1,50-$2.00.
OMG ! I love the content and the presentation style. You had my attention for the whole video. Love company forencis, learning a lot from these videos and for the first time, I switched on a notification icon for you guys.
Life isn't fair. Wealth disparity is real. Inflation is up, wages are stagnant, recession is likely. But, complaining won't help you. Cut costs and spending choices. Build your skills and earn more. Learn how to invest and grow. Take control of your life.
I love this. Life isn't fair. You have to take responsibility and do everything you can to improve your situation if you're unhappy with it. The good news is that there are plenty of resources to build your skills and learn how to invest! Start today!
The challenges we face are unevenly distributed, no doubt about it. But we all have the power to choose how we respond (emotionally and through action). Choosing our responses wisely is how we can gradually tilt the odds more in our favor. That's right, I started investing sometime in 2018 and by late 2021, I pulled out a profit of over $750k with no prior investing knowledge or skill. I was basically just following the guidelines set by my Financial-Advisor. So you don't necessarily need to be a perfect investor or do the hard works, just have a professional who guides & mentors you.
@@MIchaelGuzman737 How can one find a Fiduciary Financial Advisor that can one help make good gains during this bear market and when the bulls finally arrive? I would not mind looking up the pundit that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
@@elizabethyork590 I am being guided by *LISA ELLEN SHAW* I found her on a CNBC interview where she was featured and reached out to her. She has since provided entry and exit points on the securities I focus on. You can look her up online if you care supervision.
@@MIchaelGuzman737 Insightful.. I curiously looked up her name on the internet and I found her site, thanks for sharing.
My late father was being circumcised on Black Tuesday 1929, it was his Bris. His uncle who was holding him learnt that he had lost (a very large amount of money) and dropped him. This became something of a family joke.
Who's to blame? Ultimately, it's the monetary structure we're under. The incentives that lead to bubbles and major collapse start there and grow into the boom bust cycles.
I am happy there are public sources of this kind of information and the "I am privileged" becomes "we are privileged" and then "none are privileged, because we all know and we do or we don't"
Can you Refrase what your saying I dont understand
Australia property was unaffected in 2008. It has been on a 25 year bull run. Interest rates have tripled in the past few months and millions of mortgages refinanced in 2020 for sub 2% are due to have their fixed interest terms expire...
It might be because rich Chinese investors have nowhere safe to park their money but foreign real estate. Favourites of theirs include Vancouver and Australia. When Chinese money dries up it will probably be like the US + West Europe in 2008.
@@GAGONMYCOREY Chinese real estate is crashing as we speak , whether it drives or crashes Australia too we will have to wait to find out
Well, it's been a while since I caught one of your videos. Glad to see the quality has not diminished. It's actually gone up. Nice on-location shots too! I was pleasantly surprised to see how you described Slidebean's mission - supporting startups. I see you have pivoted away from supporting everyone to make good looking presentations. Microsoft was coming over to eat your lunch on that one.
The biggest problem with low information investors is that they bet more than they can afford to lose in things they don't actually understand... so when things get choppy they don't have the stomach for it and pull out to save their asses. We need to teach people the fundamentals of investment and how to have a long term view as well as how to actually understand the risks and opportunities to the fullest extent. High school should have a required 4 year course that covers everything and has student's actually invest a small amount of real money so students can get a deep understanding of how this stuff works, plus what to look out for. It would be better for all of us.
They don't teach finances in school
You should use the word speculator when someone is gambling/guessing. And investor when someone is putting money in a productive asset.
Everybody can learn about investing and you don't need a biased school to teach you investing. There are great websites and videos to teach you.
Though this piece of propaganda is just to rile up the plebs.
People can't tolerate investing because they don't understand you can't just make money for doing nothing, and the places you can takes a lifetime to turn that money into anything reasonable. People are too impatient for that. If you want to make money "fast" then you need to use your capital to start businesses that provide goods and services to people. Most people are too lazy for that.
@@rathelmmc3194 you should look up the term "pension"
It seems you _can_ invest money in a way that you don't have to work anymore...
@@Ferdinand208 Only places that can afford pensions are governments since they can print money to give to people. Normal businesses don't offer them anymore because they're not sustainable.
Man this is such a great piece you put together, amazing talking points and your great conversationalist, I don't feel anyone else really on UA-cam is talking about this enable the illustrate and tell the story you are, really love the piece keep them coming
Weston, do you really think slide bean put this video together all by himself?
That was the best, most concise and comprehensive yet simplified explanation of the 2008 crash and the lead up to it. Thank you. Not to throw shade, but... you really allowed the predators off the hook by failing to mention how brokers went out and sold mortgages to unqualified debtors with high pressure sales tactics, leaving their corporations on the hook for worthless loans so they could make bonus. And you have to admit, had these corporations not re-sold these mortgages as "viable" to other financial institutions, many people who were actually paying their loans would have been able to keep their houses. A glaring omission which alleviates the corporations of the soulless, criminal fraud they perpetrated on the world.
I'm Dutch and I hate investments it brings out the worst in people.
When people work for their income ( and I mean really work ) they stay humble and humane.
Prosperity without work destroys more than it builds !
Thanks for breaking this down so basically that the average person (like me) can actually understand how all this works. Brilliant. Appreciated.
The editing on these is always phenomenal.
Yah, editing is good.
Maybe so, but can’t help but feel it’s target audience is 6 year old... incredibly juvenile and immature, to the point of being annoying; especially the singing...
@@gregrn779 yeah. The signing, after the 3rd time, was increasingly irritating.
I f*ckin love the sound effects. Turns me on
Very interesting, very well presented. I would argue that "sub-prime" did not refer to low teaser rates, but to the borrower's credit. I used to wholesale such loans. There was no teaser, it was just higher interest rates due to poor credit.
If you have a nation, the nation have the loans. It's a money system like to colonise a planet every 50 years new.
I live in Slavic village in Cleveland Ohio. This neighborhood, zip code 44105, was the worst hit in the housing crisis. At one point over 20%, one in five, houses was in foreclosure. I lucked out and bought in 2013, the bottom of the market. This area still hasn't recovered. A lot of residents are fighting hard to make it happen, but folks need to realize the damage that happens to real people when predatory lending like this happens. There were entire families that lost everything. It was literally cheaper and Les damaging fiscally to walk away, and loose all their equity, than it was to continue to try to meet the requirements of their loan.
Yes you can say it was their fault for signing those loan documents, but the average signatory of these documents didn't have a fiduciary looking out for them and it's unreasonable to expect them to know exactly what was included in the document.
Stay safe y'all and i hope for fantastic financial futures for y'all. ✌️
History doesn't repeat, since circumstances are different BUT History can rhyme since even if circumstances are different they can be similar.
21:20 - you are confusing ARM (Adjustable rate mortgages) with Subprime mortgages (riskier borrowers, less likely to repay the loan) due to their lower credit scores.
The problem with ARMs was that when the rates went up, so did these borrowers' monthly payments, which they then could not afford. All at the same time.
When government allows institutions to take too much of people's money, shit hits the fan. Both government and institutions know very well what their actions and inactions will result in, they have the data and the smartest economists to tell them what will happen, but personal greed and corruption makes them blind and ignorant.
I cannot judge the content because I am not an economist. But I like the style of exposition, you make it clear for everyone.
The responsibility of every individual, including ourselves, is definitely there. That said, some individuals have more responsibility than others. A large factor in the 2008 bubble was a (even today) little known regulation on bookkeeping, specifically how to tally physical assets. For a long time, the regulation was, that it had to be on the books at the value it was bought at. That means the value of a house was the amount on the bill of sale, not the amount on the bill of sale for the house next door. That was changed in the early 2000's so that physical assets could be tallied at market value. This allowed refinancing, which really made this so bad. In fact, I heard one analysis state that the crisis ended when the old standard was reinstated.
That said, stupid decisions or mistake are always made by those in power. They are only human after all. We all must do our part, be vigilant and at the least, protect ourselves as best we can from any forming bubble. A good metric in my opinion is "if something seems to good to be true, it probably is." Does it mean I miss out on some opportunities? Pretty sure it does. On the other hand, my family is as safe as can be right now, in part because I knew something bad would happen when the money printer went brrrr from 2020 onwards.
yes, well there is plenty of mass delusion to go around at so many levels... the problem is, we will all likely suffer, though I am sure some may enjoy the carnage.
Nothing like the Summer of Love* in 2020, though!
Probably a lot worse in many areas.
* - _Void where prohibited. Your mileage will vary._
@@drx1xym154 with Russia sabotaging wheat exports from Ukraine? You can bet on it. Lots worse. Sri Lanka is just a bit of a preview of what's to come with the combination of the war and China's lending stupidity. There's an insane amount of pain coming for all of us, but the developing world will be hit the worst.
Investment markets are the easiest way to achieve rarified levels of freedom. But countless optimists have miscalculated their risk tolerance, then make emotional decisions with money they can’t afford to lose, based on tips & public sentiment.
Nothing is worth more than understanding one’s responsibility as a provider, and investing in self with skills that will always be in demand- especially when governments and banks can’t be trusted to maintain healthy fiscal/economic environments.
May I ask what steps you took, so your family is safe?
@@moniquet.6171 We bought land and are setting things up to be nearly self sufficient. Lots of money in gold and tangible assets. Some in stocks with a highly recommend brokerage at a more or less safe bank. As little money in Euros as possible (we're German).
There's a storm brewing between the US recession, the Chinese real estate bubble and the war in Ukraine. I give it 50/50 that the world will change even more drastically in the coming year than between summer '19 to summer '20.
In all these situations you can take the following away:
Don’t buy something you can’t afford
Always have liquidity
Don’t invest in anything you don’t understand
Invest in things you understand fully
Gold is a solid investment/protection against inflation
Amen. Simple truths are way better at educating than collective self-commiseration and (speculative) third party blaming.
Gold has gone down in recent months even as inflation is soaring. He didn't mention the gold bubble on 1980, where it went from 250ish to 875 and everyone was sure it was going to 1000. A couple years later it was back to 300 and it was below 300 in the late 90s. Now it's around 1700 but that's only double the high from 40 years ago and around 5 times the average price. Inflation is more than that in most things and the stock market is over 30x what it was then
You can’t eat gold. If things tank, everyone who invested in gold will want to sell it along with everyone else. The value of gold drops. Nothing is secure. Always remember that. Food and shelter are the only things that count. Hopefully you are healthy.
Nice job but a factor that was missed is the fact that Govt intervention going back to the mid 1990’s set the whole housing bust in motion. There was a bill passed in the 1970’s called the Community Reinvestment Act which was later leveraged in the 1990’s to pretty much force banks to loan to people who could not afford the mortgage. This was done to serve the “underserved” communities. When these loans started to default, the banks wanted to minimize the loss and created mortgage back securities. So in my opinion, you have it backwards… But nonetheless, great video, I really enjoyed it. Thank you.
Excellent video. It details a lot of terms and concepts I've heard of and listened to from other content creators, but haven't totally grasped before. Thank you 😊 💓
Real estate needs to be regulated. Real estate is just stock for rich people. Also property tax needs to be eliminated.
That's never going to happen the Goverment is fine with companies buying hundreds of Millions of Dollars of property increasing prices and screwing the common man.
Property tax is the ONLY funding for poor kids in most states, grow up
@@jtowensbyiii6018 u should not pay taxes for shit u already own.
Amazing video as always but those sound effects in between are super annoying.
Right, why the bizarre vocals? Very loud and annoying.
Agreed
I like them
I liked them, the opera singer vocals
I didn’t really mind it
In 2008 banks lent money for people to buy houses they couldn't afford. Bankers also lent money for folks to speculate in the stock market (as discussed in the video). It seems to me that it should be illegal to leverage any transaction.
I am amazed you didn't mention the demise of Glass-Steagall under the guise of "deregulation" which allowed these manufactured crisis to get as bad as they did.
Well spoken! I might be missing a bit about FED/other central bank's involvement in creating market cycles. The focus here was on Margin trading, FOMO and hopium. And that was very nicely formulated. 👏
Awesome video dude. I was fortunate enough to speak with several elders about living before during and after the 1930s depression. It was very intriguing to say the least. What's amazing is they did what they had to to survive and push through. Really inspiriting!! What makes today's problem is the treasury lady thinks hope will save us from a depression lol.
It is a slave system. The crisis are made.
21:30 A subprime mortgage refers to the financial qualifications of the borrower. A mortgage with a low rate for a number of years which then changes is an Adjustable Rate Mortgage or ARM.
A huge contributed to the rise of home prices where flippers and people who invested in rental properties.
As real estate prices dropped, people, especially these investors, realized they where upside-down on their ARM’s, so they just walked away from their mortgages and properties.
Even Greenspan got the “no one ever doesn’t pay their mortgage,” because no one factored in home owners that didn’t actually live in the homes they mortgaged.
I remember reading somewhere that in 2008 the US government relaxed rules against using money from criminal networks and a trillion dollars suddenly appeared to shore up failing banks and the stock market. They used drug, arms dealers, human trafficking money to "save" the economy.
Link to source?
no they didn't, they just printed more money. Stop reading Q anon type sites.
Thx for making this High quality videos! I had tears watching how we, human with high consciousness, are all sucked into these dynamics with and without the knowledge behind it. Im still positive that we will learn from these lessons. And creating n sharing high quality wisdom is the very first step. Thank you!💕
The problem is the 'it won't happen to me / it won't impact me' mentality. People think they're untouchable and that they're smart enough to outplay the fundamental fact that resources are finite. It doesn't matter how the valuation is broken down, the resources themselves will eventually run out.
The problem with the bust and boom cycle is that it's like a train. As long as it runs it generates money. The faster it goes, the more money it makes. But there is the risk the locomotive blows up, the train derails or they just run out of track. Everyone knows the problem, but the faster the train goes, the more money it makes. So people end up pushing for the train to go ever faster and every single time they figure they have found a way to prevent the locomotive from blowing up, or they figured a wait to avoid derailing and figure they will see the warning signs and jump off the train with all their cash before it crashes.
Once in a while somebody will say to the investors "Hey the train is going too fast, it's gonna end badly, I'm stepping off." And for every guy who gets off there are two who think they can push the whole thing even further.
And every time something goes wrong and most didn't see it coming because they were too busy trying to pick every single penny during the crash ...
As a guy thats into finance, loves trading, etc… this is one of the most wonderfully put together finance videos that I’ve ever seen. Really well done. Absolutely you have a new subscriber here… amazing.
"The whole banking system is a scam " Godfrey Bloom
You left out the fact that the federal government was directly complicit in the housing bubble. They did so by relaxing underwriting standards to promote homeownership. Furthermore Fannie Mae purchased these risky loans from the banks. Who then turned around and sold them to investors. What a sweet deal for banks and mortgage companies, if you ask me.
Another side of the 2008 crash is that the "housing bubble" basically cheated legitimate home owners out of the market. Prices were artificially inflated...driving properties out of the reach of many prospective buyers.
Guys, thank you for your work in making this kind of content. I just wish everyone in the world would watch this and see that this kind of thing can be explained in a way they can understand. Maybe so many more people would wake up to the hype machines and the shady practices that suck so many people in, the world would be a much happier and more stable place to be. Thank you so much ❤️
I fear what this recession is going to imply, especially when the media and politicians keep claiming everything is going to be fine.
To my mind, we've been in a kind of pseudo-recession since the banking collapse, 2007/8. On paper, the GDP looked good sometimes, but many of the companies only existed on that paper. ('Zombie Corporations').
Employment seemed high, because people who are doing 2 or 3 jobs can be counted 2 or 3 times. Inflation looked low, because they rigged the stats, with the CPI instead of RPI, and dozens of more 'esoteric' tweaks I can barely understand. All the while, the 'real economy' was a flat line, and wages were actually declining. (You're probably aware that they've also redefined 'recession' now, to say we're not having one!)
I'm not sure which is more alarming: the whole thing falling apart, so that we can eventually (around 2027?) get back to economic sanity again, or yet another can-kicking exercise, so we can continue pretending things haven't been unravelling for a decade or more...
This recession implies what the word means; a few months to years of no economic growth.
@@Ferdinand208 True, but there's a wide spectrum of situations which could be described as 'no growth': the concern is that we're arguably overdue for a full-on crash/depression...
Superb video - probably the clearest and most engaging explanation I've seen. Lenders should be required to show this to everyone applying for loans.
Long time investor, here.
Fundamentally, demographics determines long run market cycles - the proportion of people working vs those who aren't. Bank rates determine short & medium term cycles. And within that, the ~5% of the population who are extreme narcissists create the booms and busts - delusional self confidence coupled with contempt for anyone with alternative views, absolute lack of judgement, absolute lack of impulse control.
(YTs incredible algorithm bought me here)
Well done I have to say I've been waiting and waiting all the way to the end. I'm in the last one minute of the video and thank God, you spoke the truth because I thought it was gonna be another kind of blaming everyone else, but you pulled it off. I will now subscribe like and follow you well done young man keep on coming, it's good to see that not. Everyone is delusional and just keeps blaming everyone else for their problems when the truth is in the mirror..
I have read enough about the Financial Crisis but this video is special,,I never thought Id learn something new about the Crisis until I watched the video. Its so well illustrated, explained in very simple terms. This guy is teaching better than my Econ professors. Definitely SUBSCRIBING!!!!
This channel is fricken amazing and slidebean is probably the best company with startup material there is
Thank you so much for someone making a video about leveraged borrowing! This is the real reason many recessions happen. Overleverage
These things happen as the stock market has no memory, it collectively goes up and down without remembering what happened in the past
I encourage everyone to watch The Big Short and Margin Call. Those are the two most underrated movies that most people don't know about.
Both are great movies. However, if you're a young man, you should also watch Fight Club. You'll learn to not worship Mammon.
Once you watch The Big Short, you will learn what the errors were in this video.
@@Ferdinand208 If you watch Vice, you will see how government causes problems.
Been quite unsure about investing in this current market and at the same time I feel it's the best time to get started on the market, heard some guy speaking of making over a million dollars from a $300k capital since the pandemic and I'm driven to ask what skillet and strategy can generate such profit
Find stoccks with market-beating yields and shares that at least keep pace with the long term market trend. However, for a successful long- term strategy you have to seek guidance from a financial addvisor.
I'm sure the idea of FA assistance might sound controversial to a few, but a new study by investopedia found out that demand for financial advisors sky-rocketed by over 41.8% since the pandemic and based on firsthand encounter I can say for certain their skillsets are topnotch. I've raised over $500k within 18months from a stagnant $185K which was devoid of growth stocks.
How can one confirm a licensed advisor;,? I buy the idea of employing the services of one because finding that balance between saving and living comfortably requires maximum discipline. My goal is retiring or working less than 5 years from now. Pls, how do i get a hold of one?
My advisor is ''JOHANNA MUSSCHE'' In terms of portfolio diversity, she's a guru. You can glance her name up on the internet and verify yourself
Recession hit hard companies that have good management and no debt or only a little debt such that they won't go bankrupt while their share price dropped 60-80 percent means when it sold for $100/share and is no valued at $40 or $20/share means that if it returns back to $100/share you will earn 2.5-5 times on a good company. If inexperienced, definitely speak to a financial advisor or select more than one stock Jim Cramer recommends and try to find out from him when you should sell.
New to your channel. I love your presentation! Great knowledge and wonderful and simple explanations of very complicated situations. You know your stuff! Thanks for the great video!
Very well done and informative up to the 21-minute mark where you made a gross misrepresentation of sub-prime mortgages.
Sub-prime mortgages aren't necessarily adjustable-rate mortgages. That's not what makes them sub-prime. There were lots of conforming Fannie Mae, Freddie Mac, FHA and VA loan products that were ARMs back during that time. I know because I worked in the mortgage business for 13 honest years.
What makes them sub-prime is that they are considered higher-risk loans that do not participate in aforementioned federally-backed loan programs above. As you indicated earlier, these loans are securitized in bundles. They have different terms for the buyers/investors of those bundles, AKA mortgage-backed securities, based upon the expected performance using algorithms evaluating expected future credit-worthiness, past credit performance, income and equity. They're garbage loans for garbage borrowers.
What you really should have focused on regarding the bad lens Ng was all of lending having looseyy-goosey terms, the big Banks having wholesale divisions that were preaching and teaching fraud to retail mortgage originators (mortgage brokers, mortgage bankers, state-chartered bankers), and that when the rates started going up in June of 2006 and house prices soon began their decline, shedding equity from the market at the same time the sleazy mortgage saleshounds were hawking equity-stripping negative-amortization adjustable-rate index loans, which startled with artificially-low rates by deferring both all of the interest payments AND SOME OF THE PRINCIPAL PAYMENTS, thus increasing the loan balance year after year until the easy payment program ends and the gulag of payback begins, perhaps on the 1st, second, third, fifth or seventh year. "Neg-ams" were the real monster loans of the mortgage industry in The great Recession.
But the mortgage and housing industry did not collapse the economy. The economy collapsed because of outsourcing and downsizing.
By 2006, most of the office high-rise towers in America were largely vacant, like the Sears Tower in Chicago.
The people who had previously worked in those offices were getting paid often paid $300,000/year or more, but got downsized to jobs that paid maybe $150,000 a year at the same time they were stuck with all their liabilities at home... furniture loans, luxury car leases, student loans, luxury car leases, credit cards, luxury car leases, second-mortgages, luxury car leases, vacation home liabilities, luxury car leases, boat loans, luxury car leases, escalating real estate taxes, luxury car leases, escalating HOA fees, luxury car leases, and let's not forget luxury car leases. I saw it all.
Diminished household income - that's what tanked the economy. I know because I predicted it, I witnessed it, and because it hit me too.
I was a investment-wise conservative home buyer. I bought a modestly-priced home and had tens of thousands of dollars in life savings But the general tanking of the economy happened at the same time I couldn't sell any good, honest mortgage loans that would improve my customer's position. There were simply very few opportunities left in the market to refinance somebody to a better rate than they had "today". So instead of exploiting my clients with neg-ams to save my house and lose theirs, I chose to lose mine. (Nobody would hire an ex-mortgage advisor back then, no matter what.) I bought my house in 1999 for $169,500, which was on the lower-end in that market. It sold at auction for $71,000 (if I recall) eleven years later, after I had improved it substantially with sweat equity.
I hope that all clarifies the Great Recession.
Great as always, but I have to say - I don’t think of this as an economic crisis. It’s the painful knock-on effect of our monetary response to the pandemic. The pandemic was the crisis. Of course we have huge and sudden inflation after most developed nations pumped decades worth of money into our shared economies. No duh, as the kids say. Inflation was predictable and predicted by many. The question is, was it worth it? Was it the right solution to a possible shutdown of the global economy? It seems to have had the intended effect, more or less. But all emergency responses have a cost - unintended consequences, or maybe just unavoidable. This “crisis” is really a stage of recovery from a far larger crisis caused by the virus. Hence employment and demand are still so strong. I think it’s just insane to compare this apparent recession too closely with previous market bubbles - the dynamics now are dictated by rather unique primary factors, including unprecedented supply chain disruption and varying responses to it. Not that it isn’t painful, and war in Europe exacerbates it greatly. Responses welcome.
I don't think Covid really plays a part in this, or at most a small part. This mainly have to do with baby boomers (the largest generation) retiring this year opening up a void in the job market. This is why despite GDP downturn you still see more job opening and low unemployment, as people retire their former jobs will now be open and they won't be counted to the unemployed rate as they aren't going to look for a different job.
In some since this also explains the GDP down turned as the largest generation (that's retiring) probably aren't going to get any new loans.
Not to mention the 10,000 baby boomers aging out of the workforce daily from 2014-2022
Well, it’s not just the pandemic but the collapse of globalization as a concept. We will rebuild our overseas industries but we won’t be fast enough to avoid a recession.
There is no utopia only trade offs is something everyone needs to learn. I'm sure even the government knew that inflation would be caused by the unprecedented level of printing and dumping it straight into people's wallets. It was probably worth it. Probably.
If you want your analysis to be completely honest, you have to admit as well the possibility that "supply chain disruption" is part of it - inflation helps causing it. When politicians mess with the economy, things break down in unrelated places and unexpected ways. This sounds wishy-washy, but remember: if a price cap is placed on some good (artificially), shortages are the predictable outcome. If you stimulate demand through monetary measures, you will get more demand. More demand can lead to shortages, and supply chain disruptions are a cousin of shortages.
Just because this wasn't the official explanation that you heard from the official media, doesn't mean that it isn't the truth. Just half a year ago, we were told inflation was temporary, and 2 years ago, we were told not to wear masks. I think that, in order to understand the world in 2022, this mindset is required. Another example: Why are there labour shortages? Popular explanations for this are legion. Just like explanations for inflation, just like 100 years ago: Oh, it's the greedy shopkeeper, the greedy union worker, the greedy capitalist, the greedy jew. No, inflation mostly comes from money supply. People work for money, the value of money has changed, so isn't it fair to wonder if inflation and employment are related?
To make my argument more general: I believe there's even fewer "unique primary factors" in action than you think. Shortages, supply chain disruptions, wars, epidemics, this has all happened before. As a matter of fact, we're still well within the bounds of things that have happened before, so let's hope we stay there.
Taking shortcut often ends badly. Being part of crowd is main human flaw. Except when you go get back what yours from 1%. Then it's your last power left
Back in the aughts my sisters mortgage was sold before she even closed on the house . The inciting incident of the '08 crash wasn't irresponsible home owners not paying their mortgage . It was the realization that exotic mortgage backed investment vehicles were fraudulently overvalued . The ensuing crash left mortgagees , sometimes irresponsible , unable to sell , and unable /unwilling to repay more than their home was worth .
A even more simplified way of viewing this is the fact that most minorities and lower classes point these events out years before it happens. They are often told to pick themselves up and stop finding excuses. These smaller voices are often lost in the history when these execs act like they couldnt see this coming when its more like they are on the winning end regardless of the situation
It's important to note that the US dollar at least was not Fiat money in 1929. We have different problems today along with the same problems. I saw this crash coming before the pandemic. The pandemic just altered the playing field a bit. Even back then a lot of analysts were saying that we were coming to the end of the road.
In fact, some were saying it was already taking longer than they expected and a common line was, I had no idea how long the powers that be could keep kicking this can down the road.
Well, we finally run out of road. And what's happening today is much worse than what happened in 1929 in the 1930s, but at least one order of magnitude. Buckle up.
Well shit. There goes the rest of my teenage years and my 20s
@@athrowaway3487 every generation has their cross to bear. In my case it was the Vietnam war and the Carter inflation. But we got through it. 🤣
@@ReasonablySane yep, not much I can do about it.
@@athrowaway3487 you know, they're actually is something you can do about it. But you need to choose your side carefully. Meditate long and hard on the long-term effects of the politicians and policies you choose to support and protest against.
When Hillary Clinton came to Seattle as first lady back in the 90s and pushed her nationalized healthcare baloney on our city, I was there with my three daughters. We were part of a crowd of 3500 plus people protesting what she was doing while a group of about 300 hand-picked people were in the area right in front of her with well designed and printed signs. I was able to actually get into that front section and was even given a sign which I rolled into a megaphone. One of the more fun things I yelled through the megaphone was after she promised something I would yell, "THANKS, MOM!"
Thanks to our turnout in Seattle that day, followed by the one in Portland immediately after, the nationalized healthcare gauntlet was killed. Later I told my daughters that they made more difference that day than they could make in an entire lifetime of voting.
And notice that there were more conservatives in Seattle and Portland then than there are now. They were nicer places back then. 😁
@@ReasonablySane wait so you’re saying nationalized healthcare would kill the economy? How did you get there from the video???
Thankyou, what an amazing and educational video. Should be shown in schools, to show kids a bit about the real world. At 66 I learned a lot of what has happened by trusting the banking industry, and our own greed.
Every recession is caused by a collapse in the value of an asset class. In 1992, the Savings and Loan collapse was caused by the same thing that caused the 2008 collapse, people stopped paying their mortgages, and the mortgage holders went belly-up. In 2007, mortgage-backed securities bonked. In 1992, it was Savings and Loans, quasi-banks. The effects of both rippled. In 1929, the stock market collapsed. All of these were really caused by the injection of too much easy credit. Speculation occurs in any healthy market. The Federal Reserve and Federal Government caused 2008 and 1992 by pumping easy money and credit out into the economy.
I recognized that pizza slice in the intro the moment I saw it. The Nonna Maria from Bleeker St. Pizza.
I don't live in NYC, but every time I go I make sure to grab a Nonna Maria 😋 Excellent choice.
Great job. I can see all the work you put into the presentation 👊
This is some of the most important and interesting information I have watched in a long time
This is an excellent video
Wow awesome job with the explanations!
Phenomenal video, Sir! It is like I got educated on some history, along with some fresh perspectives, with "The Big Short" film summed up and thrown in there for good measure!