comments

1. Andrew Simone on February 19th, 2009 at 3:41 pm

   Man, I love this video. So clear.

2. Kelsey Parker on February 19th, 2009 at 4:24 pm

   Walken strikes again!

3. Mike Dresser on February 19th, 2009 at 8:32 pm

   From the beginning, I was wondering how they would represent “unsafe borrowers.” And there it was: overweight, smoking, 4 kids on the hip. Good times.

   Wall Street is a big shell game. Best of luck to those who can make a living in the fray, but I can’t see how any of it is more than an illusion.

4. Daryl Scroggins on February 20th, 2009 at 11:49 am

   Great sound.

5. The Credit Crisis Visualized « Deanna’s Ramblings on February 20th, 2009 at 1:59 pm

   [...] 2009 February 20 tags: Politics, The Economy, WordPress Political Blogs by deannaizme This is an excellent way to visualize the credit crisis and what caused it.  (h/t: Andrew [...]

6. RobertSeattle on February 20th, 2009 at 2:18 pm

   Outstanding – Thanks. And I don’t think you used the word “bubble” at all.

7. Pamela Basone on February 20th, 2009 at 3:50 pm

   Great video. Very clear. The only part left out is the part that explains why many of those AAA rated slices were not so AAA in quality.

8. Suzanne Nissen on February 20th, 2009 at 4:33 pm

   It’s about time someone explained in plain language what is going on !! Way to go ! thanks !!

9. Daryl Scroggins on February 20th, 2009 at 4:44 pm

   Pamela: I was thinking that too–but I bet it would another similar film to demonstrate that! All those murky pressures, and all working off of conveniently obscure mathematical models that opened the way for a bonanza in credit default swap sales and profits.

10. peej on February 20th, 2009 at 5:04 pm

    Still dont quite get it…. first of all – 90% of mortgages are still being paid. So why does the 5% default rate collapse the system? And I would think the ‘safe’ mortgages should still be safe, given they are not subprime, and house values have only dramatically fallen in some markets (AZ, CA, FL, but not so much everywhere else).

    I’m guessing leverage has something to do with it, but that wasnt very well explained.

11. tde on February 20th, 2009 at 5:25 pm

    If only they creator could have made the sub prime borrowers just a little darker …

12. Daryl Scroggins on February 20th, 2009 at 7:21 pm

    tde: true. But let’s let some guys walk into mental hospitals all around and write mortgages for the patients–and then we can listen to the lenders talk about all the deadbeats borrowing money they have no idea how to pay back.

13. Simon Julian » Crisis of Credit: on February 20th, 2009 at 7:30 pm

    [...] http://www.clusterflock.org/2009/02/crisis-of-credit.html [...]

14. Marc Lehmann on February 20th, 2009 at 8:25 pm

    Great video but content isn’t quite right. It started with MBS no/low doc loans not CDO’s. The CDO market blew up as a secondary effect. Home owners borrowed more than they could afford on overpriced assets which you mention. But the video implied that happened down the track when it’s actually what kicked it all off. The big borrow and buy bubble fueled by the Fed. The mortage brokers let people have money that couldnt repay it. All parties were at fault at the end of the day.

15. Jade on February 21st, 2009 at 6:41 pm

    Peej, you are right the video is not acurately showing what has happened, it is massively over doing the defualt element, but you are also correct that leverage plays a part…

    Imagine if you have three possibilities for your investment
    Best 9% return
    Middle 4% return
    Worst 1% return

    hope this makes sense.. there is risk in every investment, now imagine you use leverage as they described and borrow at 3% giving you 20 times what you had to invest, your outcomes now become:

    Best (9-3)*20 = 120%
    Middle (4-3)*20 = 20%
    Worst (1-3)*20 = -40%

    Quite obviously we are in the worst case right now… leverage is like having those extra few beers, it can make for an amazing night or complete chaos

16. Brendon on February 21st, 2009 at 7:09 pm

    At last, a visualised explaination!!!!!! Many thanks

17. JohnM. on February 23rd, 2009 at 2:17 pm

    Well done; I’ll have to watch it again!
    I agree with other comment: Did not use the words ‘bubble’ or ‘poor’ so-and-so. ‘Stupid’ might be a good word to add.

    Thanks

18. Peter Smith on March 2nd, 2009 at 11:46 am

    now is the time to buy a house before banks get back into GEEEED

19. Bill B. Blogger on March 2nd, 2009 at 4:40 pm

    Great job on this one!

    Walken strikes again!

20. Paulo Correia on March 3rd, 2009 at 10:21 am

    Simple way of explaining how greedy bankers collapsed the economy….

21. Dave on March 4th, 2009 at 1:40 pm

    Nice video, it is missing a few things however.. Like the fact that the government forced the high risk loans to happen.. and your solution to the problem.. The video tells us no more than what the news media has been telling us for months.. What is the link to the “how to fix the credit problem video.. “

22. The Great Santelli : clusterflock on March 5th, 2009 at 9:14 am

    [...] reminds me of the comment on the Crisis of Credit video I deleted yesterday that blamed the crisis on Carter, Clinton, and the fairness in lending [...]

23. Deron Bauman on March 10th, 2009 at 2:56 pm

    So I can stop deleting comments that blame the current economic meltdown on Carter, Clinton, Chris Dodd, Barney Frank, Fannie Mae, Freddie Mac, low-income or minority borrowers, and the Community Reinvestment act, I offer this educational opportunity.

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