The Crisis of Credit Visualized - HD
ฝัง
- เผยแพร่เมื่อ 27 ก.ย. 2024
- The Short and Simple Story of the Credit Crisis -- The Full Version
By Jonathan Jarvis.
Crisisofcredit.com
The goal of giving form to a complex situation like the credit crisis is to quickly supply the essence of the situation to those unfamiliar and uninitiated.
This is the original, full version.
I went to school for 4 years to earn a BA degree from UOP and I would say that Jonathan Jarvis (in my opinion) gave a clearer and better explanation of the concept of credit in 11 minutes than I heard in 4 years. I would love to watch more videos like this explaining the Auto subprime crisis, stocks, trading, and other things that I'm not smart enough to understand the big picture of. Thanks again and great job Jonathan!
aren't you glad you paid $60k plus for the education that you could have got here for free?
@@MassEffectFan113 actually it was prob more than 60K
Ive seen so many explanations of this crisis, but this is by far the best and most comprehensive one!
The others probably didn't understand the subject well enough to explain it in layman terms like this guy does.
Yes, but it doesn't cover everything. Another huge part of the crisis is the credit default swaps, which the investment banks bought, essentially betting against their own CDOs, putting companies like AIG bankrupt (before it was bailed out, that is)
The Inside Job- watch it
An statistician here, and I was enraptured by how easy yet complete this explanation was. 3 cheers for data visualization. Wow.
i see the problem, they were paying $10,000 for a box. Thats where they went wrong
+Move Along nailed it
LOL! ;-)
totally
Best joke I've heard all day! Thanks!
JC Denton you never cease to amaze me.
I just watched The Big Short and remembered watching this video from back when it was happening! So crazy!
+Eric Andal So much like for this comment. Same here.
+Michael Holder Same here
+Eric Andal The SAME thing and thought happened to me today! I just got back from watching The Big Short.
+Eric Andal just sent this around to a bunch of people at work for the same reason
+Eric Andal Same!
I paused the movie "The big short" and came to youtube to understand the terms and and found your video and it was helpful and now I'm back to watching the movie. Thanks 👍
Brilliant presentation - easy to understand, entertaining, scary, and a superb Infographic.
If you enjoyed, you may also like the movie/documentary "Inside Job", narrated by Matt Damon.
I saw it. Matt Damon knew how to calmly narrate a rather scary phenomenon.
@Richard Wilson yikes...chill man
@Richard Wilson wtf...dude chill the fuck out. Lmao whats wrong
@Richard Wilson chill out, relax, have a drink and maybe start jogging a little bit, that's a lot of fat to carry around everyday. Oh shave the neck beard too
@Richard Wilson mom Jokes... Ok dude grow a pair of nuts and then come back. Actual 12 year old trapped in overweight senior body
"But they have an idea", that's where you know things are going south
The best explanation of the credit crisis... A full semester worth of study summarized in a 10 minute video.....Thank you Jonathan Jarvis.....
i watch this video any time i can’t sleep and it works like a charm
This video was made over 8 years ago and it is as relevant as ever in 2016, very good explanation of this debt bubble that we are facing, Lord knows the next crash will be catastrophic ...all we can do is educate ourselves , learn the truth and be prepared
*2018
@@lolbots still low sub prime mortgages.
@@lolbots *2019
It's going to stay relevant for a long time.
"All we can do is educate ourselves" that hasn't aged well. In fact, it might be the cause (this or car loans) that will cause the next recession, essentially based on the same model.
In late 2008, I pulled an amount from my account for routine expenses. It was the only reason the economic crisis.
hahahaha
ahhahahahahaha
Your mustache trims itself though. What could that expense have been?
Fukin legend
It is stupid to say "don't buy things you can't afford". People need houses, and they can't afford because the system is rigged to make the poor poorer and rich richer, and rich folks force more and more people to owe them and make them in debt so they can get richer and buy the politicians too. Don't you see the system is rigged? Don't you see the inherent corruption in monetary system and capitalism? Stupid system just to make a few elite rich, parasites who brainwash us that there are no better alternatives. They want good slaves, that's all they want. We need Resource Based Economy for sustainability and a better future.
Jonathan - we looked at your video back in uni days to learn about the crisis and here i am 10 years later looking at it again to refresh my mind. thanks so much for the clear, informative video and really enjoyed the graphics too! love your work!
It's called don't buy things you can't afford.
+Andre K
my philosophy precisely!
+Andre K If everybody did that the economy would die instantaneously.. PLEASE TELL ALL TO DO IT!!! We need to build a new system.
+DanusMax Obviously people don't have enough money laying around to buy a house upfront. However, that doesn't mean just anyone can go and buy a 5,000 square foot house.
since the market prices of houses were going up. banks would accept essentially anyones credit.
however, the reason people would take this (that cant afford it) was because they thought there house values were going to cover there mortgage costs... as in the interest theyre making in there $600,000 house(s) they thought it was a good idea to put it on there credit cards... and hopefully sell the houses when they need to for a profit.
this was the problem in 2002, 03, 04, 05, 06, 07, and 08.... banks werent controlled and gave out these sub-prime mortgages only to make a quick buck from investers.... the sickness was that these cdo's were labeled as triple aaa bonds...
bankers are just plain greedy
jake smitth Blame the banks! Blame the rich! Blame anyone, everyone, but yourself!
Best explanasion of 2008 crisis i have seen so far!
I need to get me some of those boxes...
+Nikhil Autar I'll sell you a box of magic air for $1000. guaranteed invisible.
+Nikhil Autar hahhahaha
Warsrogue I’ll take 10! 💁♂️
😂😂😂
You mean the boxes with ticking time bombs in them? have at it, bro xD
I'm just glad they papered over the problem with more easy money. Hopefully this time it works out better.
That's hilarious, blunt and to the point
HE HE EHE EHEHEHEE that's hilariously sad @@wayneruffner223
Had to watch this video for school but this is the first time I genuinely understood what actually happened the whole way through. Thank you.
"Home owner"?? Not really, until the home is fully paid for you're a mortgage holder.
I see what your saying, but you still own the house. The bank is not responsible for maintenance and repairs. You are
You never own your home. The government does. You will pay property taxes forever
@@bd5236 the government does not own your home simply because they tax you.
@Shawn Huffman you pay tax on almost everything, the government does not own those things.
@Shawn Huffman Yea I get that, but you are still the owner, the owner can decide to knock down the house, renovate it or whatever, the government cannot. Paying taxes just comes with ownership, I pay the government tax when I buy a car, the car does not belong to the government because of this.
thank you you actually explained something made complicated by everyone
you condensed the big short within 10 minutes
Thank you for making an extremely confusing topic much more understandable!
Thank you so much for this video ! It is clearly explained and you taught me more things in 10 minutes than I learned in one semester ! Keep going, you're awesome !
Thank you TH-cam algorithm for finally giving me a video worth watching that I didn’t have to search for myself
That was by far the most well made, clear and easy to digest explanation of the mortgage crisis I've seen. Excellent video sir
What is even worse is the fact that there are no regulations for the rating agencies. They are paid by the investment bankers. Hence, the rating is meaningless.
The real problem is that investment banks leverage the shit outta rating agencies. It forces the agencies to rate their sub-prime CDOs higher so they dont run to seek a higher rating elsewhere.
Professional guidance brings about remunerative results in trading. Great job Payden, you exceeded my expectations. Thank you.
I’m interested please. I want to build my portfolio, and trade profitably.
5 accounts of the same age with 0 subscribers praising a man you've never heard of before for advice you didn't ask for 🤔
I loved the music after "welcome.... to the crisis of credit". An under appreciated part of the video
I am showing this in my introductory macro course each year. Extremely well made! Thanks a ton!
No jail time for anyone.. Free to do it sll over again.
If anyone should go to jail, it should be government officials that started this mess, not the banks.
@Martin Shepherd No, they understand. But they're corrupt af and being paid off by lobbyists.
@Martin Shepherd people who made bad loans and took out bad mortgages should have taken a bath. fuck em
The tie to government is never explained- the triple A rating, the government insuring these bad trading policies, and then eventually bailing them out with free money etc.
+James Gant Most of the big name rating agencies are actually private companies. So this is not accurate.
+James Grant as Roman said, most of the rating agencies are private firms, who were more concerned about retaining customers. Plenty of underpaid staff also helped to incentivize easy passes on junk bonds to re-rate an ordered CDO of risky mortgages into a AAA rated CDO.
But that's not to give the government a clean pass. The SEC at the time was sitting around doing next to nothing. Just a year or two after the crash, there were reports of the SEC Office of Inspector General turning up plenty of its regulators watching and collecting porn instead of doing their jobs.
The whole system was just a shitstorm of bad actors waiting for a poorly built house of cards to come crashing down. The bailout was a bad idea, and the banks weren't given enough restrictions on their restructuring for taking TARP. I said it in '08 and continue to say it today, if you took TARP money, you have to listen to the regulators and do exactly what they said. Not give your execs golden parachutes and pay off lobbyists to turn the political tide in their favor.
I you should credit some subscribers. You deserve a lot more!
1 year full of ups and downs, ain't ya?
Excellent information. Clear and concise.
I watched the movie, but I never understood what was a CDO.
Greetings from Peru 🇵🇪
I came here after watching The Big Short and it makes so much more sense now
Thanks for this video man, easy to follow and understand...
dude! i finished my chapter 11 watching this video for my econ class!!! ur awesome mann! thumbs up! :D and this is not only this class , I also watched it for poli sci too! :D
chapter 11? what made you bankrupt
My teacher should have shown this video in economics. To bad I was in school when this was happening... and to bad TH-cam didn't really exist yet.
lol same . I'm studying finance , when the teacher explains in detail of subprime crisis , the whole class was confused as fuck . But lucky , i watched The Big short , Margin Call and this video before so I can understand better than them
You know youtube existed when this was happening, right??
be ready for 2019-2020 time to make $$ of the crisis
The best educational video about 2008 financial crisis. Thank you!!!
Wtf! I never thought something soo complicated can be explained and understood soo easily! You did a fking AAAmazing Job
so basically GREED caused the crisis
+msabri1 No, it was nuns who caused the crisis...
+msabri1 Greed is also the one thing that keeps our system running smoothly. This problem originated with government's control of interest rates.
Joshua Stowers how can greed keep our system running smoothly? could you elaborate.
Because people always try to improve their own position (greed) they bend over backwards to provide, improve, and invent services and products to sell for us. Since everybody else is doing the same, businesses find themselves with competitors, which they then have to battle with by offering better or cheaper goods and services. In the process jobs are created, there is competition over employees, and better wages as a result. By acting in our own self interest we have been able to develop extraordinary medications, invent advanced technologies, and pull almost everybody out of poverty.
msabri1 It's not a perfect system, but it does a surprisingly good job.
The one that paid off their home, sleeps blissfully at night.
Lol, I just paid an extra $5000 on my mortgage this year, cheating the banks out of $10,000 in interest. Prepay you loan as much as possible.
Don't you pay a premium everytime you prepay? There's a fee. Which makes sense, because your mortgage deal is based on the dealer's interest income. No reason for them to lend you if they couldn't make back a profit above LIBOR.
You are not cheating the banks. Giving the money earlier than expected has value.
Such a lucidly told story. Thank you very much for this!
This is the best presentation of the credit crisis, and I've watched 10 videos on it thus far. This same concept can be applied to anything, credit will never work in any system unless that system is actually creating new value. Using credit for automation works; using credit to buy assets, not so much.
7:22 the parents smoking and the dad presumably holding a bottle of alcohol lmao
Edit: he even has a heart tattoo on his arm 😂😂
I'm in 2021 right now and truly amazed to see this.
Awesome work done in visualisation, Cheers!
excellent explanation, the best I've seen for the 2008 economic crisis
great vid best I ever seen on this besides inside job
Why was there no mention of Fannie Mae or Freddie Mac? Or about Barney Frank? This presentation left some vital points out.
Of course it did. It's meant to be brief presentation. For me the most important part the presentation left out was the trade in Credit Default Swaps. In any case, I think there is another presentation about those things.
Tell me about barney frank
Lol! Love how they associate the irresponsible with a fat guy and more kids 😂
He and the wife were both big drinkers too.
i remember watching this video in class with 240p on a projector. i’d like to thank you greatly for making this HD.
what an amazing presentation. Made everything crystal clear. Jonathan Jarvis thank you much for creating this amazing presentation and sharing it with the world.
The only thing I disagree with in this video is when he says "Federal Reserve Chairman Alan Greenspan lowers interest rates to only 1% to keep the economy strong" If having low interest rates keeps an economy strong, then why would they bother changing it?, Why interfere with economic prosperity? No, when the federal reserve keeps interest rates artificially low, all that means is that they are making money EASY to borrow and ACTUALLY sends false economic signals to the economy indicating there are A LOT of savings. But there are NOT a lot of savings. Their source of "savings" is a counterfeiting operation called "The Federal Reserve" which prints the money OUT OF THIN AIR. Unfortunately these low interest rates are meant for big wall street banks to borrow cheaply and speculate with these financial instruments he talks about. CDS, CDO, etc. Artificially Low interest rates causes inflation and makes everyone POORER. Moral of the story END THE FED.
To replace it with? Anarchy? Another bank/ reserve? Communism? just kidding but it's choosing between two evils
The FED, at least in USA, is not allowed to print money that freely. They are tied to a treatment that allow printing money proportional to their gold reserve. That is why USD has been a strong currency and used world wide. (That and a strong Economy)
After years of having high interest rate, effectively attract a flow of money into reserve, USA has trouble spending all those funds effectively. When you have so many money to spend and cannot used them well, and yet you still have to pay interest to bond holders -> Let's "give away" those money.
Hence, they started to lend out, starting with lower interest rate. They however, should create a barrier to borrow to ensure those funds/money are used correctly.
The currency crisis start with "risk", basically, bank took up a big amount of bad debt that are not recoverable (aka. default in the video. I have no ideas why this terminology was used, never heard of them before although I major in BA). At other perspective, we can say that GREED got over them and they willing to take risky assets without using the correct return rate.
Hoang Minh Le First of all your wrong.., there is no Gold Standard anymore. They eliminated that back in the 1970's under President Nixon which means YES they can print money that freely. And now that the entire world is on this FIAT paper money system there is not ONE credible currency. Every Currency out there is being inflated every single day by the central banks around the world. This is why debt is at record levels and the government and fed are pouring more and more money into the system which makes everyone poorer (INFLATION). You need to understand that Politicians, Bankers, and the Media work as shadow governments to rob the public blind. I dont mean to be rude but whatever you learned in Universities in regards to economics is false and is bad information to keep the system the way it is. You need to understand The Bilderberg Group, Council of Foreign Relations, David Rockefeller, the Rothchilds and their ownership of this system through the Federal Reserve Bank. They have been in control of our education system for years to keep majority of the public mislead to the truth about the world. And the truth is quite disturbing. After doing my research about the New World Order, Freemasons, Illuminati, Luciferienism and Satanism i can say without a doubt that Truth is Definitely Stranger than Fiction. Btw these financial instruments you hear about in this video were created by the very scum bags Larry Summers, Tim Geithner, Robert Ruban and the Bush administration to purposely destroy the economy and they KNEW the end result would be catastrophic and that the bankers would be the ONLY winners. Once again this is only a small part of the entire picture. Those names along with MANY others have sold out. You need to understand that majority of the government is corrupt to the core... That should be OBVIOUS by now...
Hoang Minh Le Your first paragraph couldn't be further from the truth
D R To replace it with nothing. We do not need the Fed. It's an evil tool for the government to keep us in debt while they buy more toys.
probably the best visual explanation ever done. good job!
The best explanation I have seen on the subject.
Let's review this video in 10 years from now...
We will be laughing.
Great video
This is by far the best explanation I have ever seen on the subject. Thanks!
Feeling blessed and Expressing Gratitude
This is the best explanation I have ever seen.
The best explainer for the financial crisis I've ever seen.
Sharing with my friends, subscribed. You nailed it!
0:25 - "how ddlh happen?"
This is when I graduated undergrad in NY and no one was hiring. Talk about struggle ☠️
thanks lord
I have no loan, and I have home from my own savings!
This is what I should’ve been Learning in school instead of reading the catcher in the rye
Our Economy runs on Credit,
there is more Credit out their than actual physical paper money,
that's why we have cycles of recessions, and then every few decades, we have a Economic Collapse or the Depression.
Basically, people are buying things they can't afford, and with more credit in the market, than income, people start defaulting on their loans, and voila, Banks and Investors lose their money, people lose their Collateral , and everything just goes to shit.
thank you jonathan jarvis. this was brilliantly done! really helped me get my head around what happened.
Even with many details missing (not explained how the crisis was spread all over the world), the explanation is pretty good
Someone ask France if we can borrow a guillotine
Everything was right, right up until about 6:40. The problem is that this does not cover the massive carrot and stick model the Federal Government set in play. They punished banks, large and small alike, for discrimination if they didn't make enough mortgage loans to minorities. This was regardless of income or credit status. Also, who do you think was doing the overall insuring of the entire housing market that essentially took the risk away from the banks in the first place? Freddie Mac and Fannie Mae.
So banks were punished if they didn't give enough mortgages (essentially to people who couldn't afford them in the first place) and the risks were taken away by the Federal Government. They were essentially getting handed free money. That's why the bailouts happened. Privatize the profits, socialize the losses.
The 2008 financial crisis wasn't a problem of capitalism, no. It was a problem created by perverse incentives instituted by multiple levels of government combined with ridiculous fed policy, neither of which have learned from their mistakes.
DakAttack the problem started when the fed artificially increased credit
DakAttack aka min 1:25
@@metallica27796 Yes that more or less started "A bubble", but the federal policy directed where that bubble went essentially, and made it as large as it was.
I never heard anyone ever mention the fed interest rates being lowered as being the beginning of the crisis. Anywhere else it always starts with subprime mortgages going through the roof but never explaining why.
watched at my freshman year and watched it again four years later great explanation video!
I bought a house when they were incredibly inexpensive right after the crash, AND I got an 8k tax credit that I didn't have to pay back if I lived in the house for 2 years ! ...I bought a house that had sold for nearly 400k and picked it up for 140k ( 132k after the tax credit ) it's paid off now and couldn't be in a better place financially...it's all a waiting game, save your money and strike when the irons hot
@Gemma W true sometimes
@@filthbomb Have a feeling the housing prices are going to start plummeting after this whole Corona ordeal. A good time to buy homes could be coming up in the next 6 months to a year
What program did he use to make this?
Wow - this is amazing. I have never fully understood this phenomenon until now. Thank you!
I am so glad to have found this. thank you so much. great job.
Nicely explained. Almost all the aspects of crisis covered in a short video
This is the best explanation of the housing crisis that I’ve seen.
This is a really great video and it explains the meltdown quite well, but it would not have been as disastrous without the concept of the credit default swap and the synthetic cdo
One of the best videos on this topic. Nailed it .
So we could fix all of this by buying houses cash, got it.
Borrowing is the basis for economy, though. Its pretty easy just to sit down and say, "Im going to only pay for things that I CURRENTLY have money for."
Its a pretty different story when the $2,000 car you have breaks down every day you go to work, and you start thinking, "Man Im losing a lot of money since I keep getting to work late. If only I could borrow some money for a functional car..."
Borrowing increases efficiency, the trick is regulating it well.
You'll fix the problem for yourself for one single context. But in the longterm you havent succeeded in doing anything. You will eventually sell your house someday, be it alive or dead, people will want your estate and to whom and how will not be entirely be up to you.
Thank you so much for the clarification, Jonathan.
Thanks for the great video. Let's not forget the reason why the crisis was so badly magnified: Synthetic CDOs--insurance on the original position (side bets, really) that were made so many places removed that most investors had no clue what the original investment was.
There's also the slicing up of primarily sub-prime loans together with other assets that were given AAA status by the ratings guys who inflated their ratings just to retain their customers on Wall Street.
Then their was the other fact that AIG had issued Derivatives that were worth more than the entire GDP of the Planet.
Moral of the story: Don't get a mortgage.
Raining City That wasnt the moral you dingus.
No, moral of the story: read the fine prints that your bank hand you out, or request one to read it.
@@analienfromouterspace and don't buy things you can't afford
Amazing presentation of the crisis! Even with some knowledge of what's going on, the video gave me chills at the end. Excellent delivery!
Superb!! Still come back to this for revision. Wish to see more such videos!!!
You did't tell the whole story. Banks were strong-armed via the CRA by the Clinton administration which was also continued by the Bush administration. Banks were accused of racism, were given quotas to fill for sub-prime lending. Capital risk was replaced by tax payers. This was a government/political/socialism redistribution of wealth created crisis or face congressional consequences. Community groups like ACORN and NACA demanded high risk loans, testified regarding compliance of banks in regard to how many risky loans they created, and congress listened and coerced banks. Credit organizations had perverse intensives created by government regulations to rate mortgage derivatives as triple A when they weren't. Risk managers were fired when they told the truth to GSE organizations like FREDDIE and FANNIE, which bought these risky mortgages backed by taxpayer money. They transfer risk from banks to taxpayers, compensating the whole system of perverse risk taking with taxpayer money. This was a ticking time bomb created by politicians. Everyone knew the risks, but the politicians only cared about their short term interests of maintaining their powerful political positions. How come you don't tell the whole story?
+Mike Nelson Let me see if I have this right. You're saying that this was socialism when the government steps in and does its job to limit the losses? There was no way to protect everyone but without government oversight it would have been much worse. When Goldman Sachs were bailed out it was the last thing they wanted because it would mean the government would be watching their every move. So when AIG paid their executive bonuses before doing anything else, Obama made them pay it back. That is what government is supposed to do. Don't believe what Fox News and the bankers and government haters tell you. The tripwire for the GFC was exactly the same as for 1929 - an excess of cheap credit and lack of regulation. The banks did not comply with any due diligence when it came to lending and they resisted every attempt at regulation and still do. And government haters and free market capitalism types are the problem here because they continually argue against making any new laws to limit losses. As long as that remains the case, the little guy will continue o get it in the neck.
I think now I can rewatch The Big Short.
I Appreciate your hard work. this is one of the best video I ever watched I keep re-watching over and over really well explained.
Bitcoin to the rescue!
we should probably talk bud.
anyway i could contact u?
thomas samson nope, i wanna see his research .
This guy is a genius
This guys rich now
People thought Charles Ponzi was a financial genius for a while too...
so the poors caused the crisis
+Genesy91 no the mortgage brokers
+Kelvin Foe No it's the central banks.
+Genesy91 what? it's the wall st. bankers who got greedy, haven't you been watching the news?
Genesy91, you're straight up dumb. We are now all dumb, including myself, for responding to you. This video made it all too simple to understand and yet your train is still stalled at the station. Jesus Christ of Latter Day Saints, I want to slap the shit out of you. lol
No and yes, it would be more accurate to say the government enabled both parties to make bad decisions.
I hope you're a teacher, cause that was as clean and understandable as it could ever be.
I loved the video! So easy to understand. This guy rocks 🎸
AWSOME!!!!!Best explanation of the crisis ever!
Fantastic explanation. I understand this a lot more than I did before now. Thank you.
very good video, our Politics and Economy Teacher has shown us this Video as the best explanation for the financial crisis...
This was a very good video explaining the credit crisis and it really helped me get a better understanding. It kind of points out what being money hungry can cause.
Beautifully explained , thank you so much.... Finally feel like i understood the big short !!!
One of the most informative videos out there.this is a excellent education on the subject
A very good work. The next huge crisis is just around the corner!
can not be explained better than this.
Excellent video. Thank you. The problem is GREED. The abnormal desire for more money.