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
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.
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.
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.
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.
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'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
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.
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!
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.
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.
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
@@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.
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'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.
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
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
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
+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.
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.
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.
@@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 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.
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.
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?
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.
+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
After browsing through myriads of You Tube videos, this one by far was the most easiest to understand from content and delivery point of view in providing clarity around the whole GFC of 2008...We’ll done ✅
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.
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.
+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.
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.
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.
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 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!
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.
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
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 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.
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.
>>>>>> 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>>>>
Really good episode you two. I fell off for a few episodes because I thought they were getting a bit juvenile. This one definitely felt like the Crash Course I know and love.
After watching several videos, i still couldnt understand what caused the crisis, but after watching this video.... Man I just automatically subscribed
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.
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.
I'm surprised they didn't talk about the issue of correlated risks. Mortgaged backed securities were seen as safe for several reasons, the historical data on mortgages, the ability to sell a house if the borrowers defaulted, and the appearance of diversified risk (any individual MBS was made up of slices of many different loans so even if one person defaulted, that default would be spread across many shares of that mortgage). The problem was that these risks were correlated. One person defaulting puts another house on the market, driving down prices, leading to more defaults, lower prices etc. Therefore, simply cutting up individual mortgages did not actually reduce the risk, since the risks were all correlated.
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 $35,000 over the past 4 years and the market goes up consistently month after month. It is all a scam. I now just do the opposite of what documentaries, youtube, Business Insider, & ZeroHedge say to do. That is the surest way to make money nowadays. The internet is a breeding ground for idiots and people who speak what they don't know first hand.
This is such a simplified explanation that doesn't even cover the mechanism that allowed these mortgages to be lent out in the first place. Banks Fractional Reserve Banking being decreased to allow more leverage. To add interest rate drops, yes glass steagall, the FEDERAL RESERVE allowing all this happening.
Robert Richter Really ? Or maybe its becuz its so fair out of reach for you that you dont understand what it is Im talking about ? Lets first lay the ground work.....What is fractional reserve Banking ?
+COGS's CORNER Hey man, you're on the right track but slightly off the mark. If you'd like to hear an explanation from a guy who spent his life successfully out trading corrupt firms like Goldman Sachs, check out Martin Armstrong's 4 part explanation on the history of the Federal Reserve: www.armstrongeconomics.com/?s=federal+reserve&submit=Search
+Coletrain hey thanks for the link, I will check it out, being a trader myself always good to find successful traders and what they did to find success. My trading is more technical not so much fundamental but fundamentals are the drivers of the market, thanks. To add looking at his website this is like a book on trading and the FED wowza. Where to begin? any suggestions ? The beginning is always a good place. Thanks again would have never found this, awesome stuff. Meow
+Coletrain then I just realize I know exactly who this guy is hahaha but didn't know he had his own website, that talked about his trading aspect. I wanna see his movie but I'm a cheap ass don't wanna spend the 45$
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
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.
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.
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.
“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
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.
Who’s here during the great crash of 2020?
Vinista 🤚
woot
lol u already named it!
👋🏿
Not me.
So it's basically because the financial industry turned the economy into a Monopoly game played inside a casino. Amazing.
exactly
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'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 TH-cam back in 2006
I'm 13 and I understand this too
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.
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!
"How an Economy Grows and Why It Crashes" is a must read.
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.
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.
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
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😭💔
"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.
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).
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'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
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
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
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
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!
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 TH-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)
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
I wouldn't say "things got better" I would say "things were covered up" , or at best, "patched up", great explanation though, thanks.
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.
"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 love these people for the way they articulate lessons. They make it interesting and simple to understand such complex subjects, events and etc.
My brain just exploded from excitement !!! Mr. Cifford and Crash Course together ???? MY DAY IS MADE
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.
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 TH-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.
I learned in 11 minutes what the last 8 years of explanations from the media completely failed to do. Thanks Crash Course (^_^)
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?
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????
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!!!
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.
Mortgages: you might already know what that means
Me: yes, yes I learned from monopoly
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.
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
@@AlinaAnastasiaMichael Good to know
You guys are the best, this was one of the best explanations for the crisis of 2008 i have ever found. Keep up the good work i love the channel
"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
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?
"The Fault in Our Stars" Hrmmmm... I bet that would make a good title for a book.
That was muuuuuch better video than the previous one, i could understand very well. The seriousness at the end surprised me.
Superbly easy way of explaining the 2008 FC, glad for this channel's existence!
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.
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
literally the best explanation of this crisis on YT.
After browsing through myriads of You Tube videos, this one by far was the most easiest to understand from content and delivery point of view in providing clarity around the whole GFC of 2008...We’ll done ✅
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.
It's so great to see Mr.Clifford in crash course!! I passed all my econ classes thanks to you.
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.
This is the best channel on TH-cam hands down.Learned more here than in class. God Bless your souls.
Guys i had to watch the big short twice and read about this many times. By far this is the best explanation i have come across. Thumbs up
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.
Can't wait to watch the 2019 version!
Here.2020
Beautifully written and thoroughly explained. Love it.
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.
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?
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.
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.
"The fault lies not in the stars..." Woah! John Green out for a day and these people hung his principles upside down!? ROFL...
Finally,someone who explain this in a understandable way
So far the simple yet best video on the subject. Simple because avoided needless economic jargons.
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!
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.
Thank you for this. You took a very complex topic and made it super easy to understand.
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
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.
had to come to this video while watching the big short. its a great film by the way, just like this video
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.
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
>>>>>>
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>>>>
The way you conduct your explanation is just phenomenal.
Thank you.
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
Thank you so much! Such a thorough explanation - made everything about 2008 financial crisis so clear.
Really good episode you two. I fell off for a few episodes because I thought they were getting a bit juvenile. This one definitely felt like the Crash Course I know and love.
Watching this in 2020 as we go through it all over again.
After watching several videos, i still couldnt understand what caused the crisis, but after watching this video.... Man I just automatically subscribed
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.
2019 economics be like: i still need qe, i feel so sick
2020's sharpening the axe
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 ))
I'm surprised they didn't talk about the issue of correlated risks. Mortgaged backed securities were seen as safe for several reasons, the historical data on mortgages, the ability to sell a house if the borrowers defaulted, and the appearance of diversified risk (any individual MBS was made up of slices of many different loans so even if one person defaulted, that default would be spread across many shares of that mortgage). The problem was that these risks were correlated. One person defaulting puts another house on the market, driving down prices, leading to more defaults, lower prices etc. Therefore, simply cutting up individual mortgages did not actually reduce the risk, since the risks were all correlated.
When this happened as a kid I didn’t notice much but looking back it impacted a lot
What a mess. I remember not being able to buy a car, but able buying a house with a ninja loan in 07 🤦♂️
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.
My dad worked for AIG in 2008 D:
That wasn't a good time for us.
This video is beautiful and teaches soo much, I love this channel.
I started watching "The Big Short", could not understand anything, so came here! I guess I am ready to rewatch that movie now.
This is such a simplified explanation that doesn't even cover the mechanism that allowed these mortgages to be lent out in the first place. Banks Fractional Reserve Banking being decreased to allow more leverage. To add interest rate drops, yes glass steagall, the FEDERAL RESERVE allowing all this happening.
+COGS's CORNER That's such a disjointed mess that it's clear you have no idea what you're talking about.
Robert Richter
Really ? Or maybe its becuz its so fair out of reach for you that you dont understand what it is Im talking about ?
Lets first lay the ground work.....What is fractional reserve Banking ?
+COGS's CORNER Hey man, you're on the right track but slightly off the mark. If you'd like to hear an explanation from a guy who spent his life successfully out trading corrupt firms like Goldman Sachs, check out Martin Armstrong's 4 part explanation on the history of the Federal Reserve: www.armstrongeconomics.com/?s=federal+reserve&submit=Search
+Coletrain hey thanks for the link, I will check it out, being a trader myself always good to find successful traders and what they did to find success. My trading is more technical not so much fundamental but fundamentals are the drivers of the market, thanks.
To add looking at his website this is like a book on trading and the FED wowza. Where to begin? any suggestions ? The beginning is always a good place.
Thanks again would have never found this, awesome stuff. Meow
+Coletrain then I just realize I know exactly who this guy is hahaha but didn't know he had his own website, that talked about his trading aspect. I wanna see his movie but I'm a cheap ass don't wanna spend the 45$
That acdc belt buckle is dope.
yeah ..
i think is kool
It's tacky!
Found the boomer
@@IAmValefree its not the music its the majority of said crowd and now its tainted acdc they where my introduction to rock back in middle school 2007.
Who does your animation? Excellent video btw. Thank you
Probably Thoughtbubble.
congratulations for *10 MILLION SUBSCRIBERS*
as a non native speaker,keeping up with them and translating the infornation as well as processing it in my mind is a huge pain