Subprime US Banking Financial Crisis Explained Part 1

my pleasure thank you for the comment. Best Regards, Dave

This is great! Thanks.

Hi Matx1000, Thanks for the comment. Yes I am aware of the general disconnect that has developed recently in the lending markets as they relate to interest rate policy set by major central banks such as the BOE. I think this is a result of the fact that since so many banks have run into problems as a result of aggressive lending practices they are now charging more of a premium to lend money than they otherwise would. I think that this will eventually work itself out however. Best Regards,Dave

Hi,
as you may know, after summer 2007, banks start to behave little bit aggressively, as banks lost money in subprime market, Furthermore, Bank of England Interest rate is 5% but Banks credit card interestrates are around 15% to 19% PA or morgage rates are around 7%-9%, altought BoE reduced to interest rate lastweek, non of bank reflected this reduction to i-rate
Do you think transaction monetary policy will be end up in couple of years as banks does not care about BoE interbank base rate?

Many thanks for your invaluable inside knowledge, my appreciation to David Waring.
Rrgards,
Ed

glad to have you as a listener gcjuang. Best Regards, Dave

Listen to your video clip is one of my important daily job now.
Thanks for all.

my pleasure thank you for the comment and be sure to check out Informedtrades we just launched a whole section on the subprime financial crisis. Best Regards, Dave

thanks so much for putting this up

This part is also great, although Greenspan lowered interest rates to 3.0% after 9/11 and then after the accounting scandals in 2002 to 1%. Some even accused him of engineering the bubble because he talked up ARMs during that period, I don't know if that's true or not but I saw in the wiki article calculations that 1% FED interest rate has a 10% effect on FRMs and about 25% on ARMs. so what does that mean if interest rates start swinging back, what will negative equity mean 4 homeowners?!

thanks for the comment. I tend to believe that the average person is not utterly stupid but I do believe they are misinformed a lot of the time. Thats why I put these videos together so people can get what I believe is factual easily understandable information on the mechanics which will then allow them to make their own decision on who is to blame etc. instead of listening to what others tell them without an understanding themselves. Best Regards, Dave

you could have saved a lot of time by just telling the bare facts; Wall Street, insider trading and the banks and Mortgage companies were just giddy with greed and were dancing the jig over the utter stupidity of the average borrower. They caused this mess and now they want the feds to bail them out. Like the savings and loan debacle caused by Jeb Bush and cronies, the middle class will be forced to pick up the tab. God bless our government

Hi Dslcobra, Thanks for the comments and for the look from the inside there it is unfortunate that this type of thing was allowed to happen. Dave

You should read "NO MONEY DOWN FALLS FLAT"
It began years ago when Lewis Ranieri, an investment banker at the old Salomon Brothers, dreamed up the idea of buying mortgages from bank lenders, bundling them and issuing bonds with the bundles as collateral. The monthly payments from homeowners were used to pay interest on the bonds, and principal was repaid once all the mortgages had been paid down or refinanced.

I like how you explain the ARM and Hybrid loans. We were told at the company to tell people that it was fixed for 2 years and adjustable for 28 (2/28) and that if they refinanced with us, we'd give them a free refinance in 2 years before the rate adjusted. The key is #1 We were willing to say ANYTHING so we could close the loan and #2 We weren't even aware of whether or not our company would even exist in 2 years. and we didn't care. Most of these banks and companies went bankrupt overnight

They call you, get your SS# and then do their best to set up a loan. They hit you over the head with a broker fee (as high as possible). The reason is simple...they get paid on commission so they need to charge you as much as possible to make a bigger check (sometimes they earn $15,000 a month). Brokers, Wall Street, Banks and the stock traders behind this are the respobsibile parties for the MESS.

I want to see someone make a MOVIE about this shot in the same way as BOILER ROOM.
I worked for 1st Capital and Fidelity borrowing in NYC as a part time job uintil I realized what they were doing. First, the company names resemble CAPITAL 1 and FIDELITY investments...you get confused talking to the COLD CALLERS who call you up and think you are speaking to trustworthy companies. These bastards originate loans and most of the workers are UNLISENCED and many are college dropouts.

glad it helped. Let me know if there are any questions I can help with. Best Regards, Dave

thanks very much. doing an essay on this at the moment and the vid makes it so much easier!

much appreciated. Best Regards, Dave

Fantastic vid Dave. Just ran across it. Doesn't get unnecessarily technical or into unnecessary details, but puts everything out there for a foundation that people would need to know. 5/5

my pleasure thanks a lot for the comment if you have any questions let me know. Best, Dave

Awesome i really appreciate your taking the time to do this.

glad they have been helpful and thanks for the comment. If there are any questions I can help with on your project please let me know.

Good job of putting these videos in youtube, I'm going a university project on subprime maret crisis and your videos are a great help.