/biz/ - Business & Finance

[Anonymous No.16663853]

Can someone explain the 2008 crash to a brainlet?

[Anonymous No.16663859]

>>16663853
Planned before hand.

[Anonymous No.16663862]

>>16663859
IT WAS RIGGED FROM THE START

[Anonymous No.16663863]

banks made a shit ton of money packaging up mortgages into specialized derivatives, banks started handing out mortgages like candy so that they could sell more of the derivatives. inevitably, people were unable to pay off their mortgages

[Anonymous No.16663868]

>>16663853
Jews

[Anonymous No.16663872]

watch the big short
also buy link

[Anonymous No.16663878]

>>16663862
Not necessarily from the absolute beginning which no one alive can accurately pinpoint.

[Anonymous No.16663879]

>>16663872
read the fuckin book instead

[Anonymous No.16663881]

>>16663863
truthpilled
they also speculated on those derivativves but in the end it was all relying on people being able to pay back their debts, and the fact that once their realized it was rigged they started selling, it crashed the market of real estate with it and the whole market took a hit

[Anonymous No.16663886]

>>16663863
Can you expand please? I have heard about that but don't actually know what that means

[Anonymous No.16663889]

Why didn't FED bailout Lehman Brothers?

[Anonymous No.16663890]

>>16663872
I have, I also saw inside job but that was years ago so I should probably watch them again

[Anonymous No.16663891]

>>16663853
You might hear it referred to as the "Subprime mortgage crisis." This is because it was caused by banks giving out mortgages that they really shouldn't have, because the people they were lending to weren't very credible. You had basically the entire economy in on this too because of these things called "mortgage backed securities." They were designed to spread out the risk of issuing mortgages among multiple people, but that backfired big time when a bunch of mortgages snapped at once.

This whole thing caused a deflationary spiral that pwn'd the entire economy. There was less money, so less demand for goods and services. This meant that companies couldn't expand as much. This decrease in expected cash flow hurt their stock value, which hurt the markets some more.

[Anonymous No.16663893]

>>16663853
the official story is that too many banks were giving out home loans to deadbeats and people who it was 50-50 whether they would actually be able to pay back the loans. These are called 'sub-prime loans'. Well loans need to be payed back with interest, the more money a bank loans, the more future profits they can claim they will get.
Well the bank also sells on these sub-prime loans to other financial institutions into 'packages' with other debts. Same principle applies, more loans, more future profits. So some institutions started buying up tonnes of these sub-prime debts, if you buy 100 different loans/debts and 10% can't pay it back, you still get the repayments of 90 of the loans, and the profits absorb the defaults.
Well that's all well and good but what happens when you underestimate and in fact 20% or 30% of all loans start defaulting? Now your profits evaporate, seemingly in an instant suddenly that future money you thought you had is gone (even though it was just an assumption in the first place). If you bought thousands of sub-prime loans now you get next to nothing.
Like >>16663881 this anon explains it also had the side effect that banks started loaning less money to sub-prime lenders (deadbeats, people with unsure future income streams) which meant less demand for housing since there were less loans to buy them, which had knock on effects for developers, the tradesmen employed by developers etc. many of these people now can't make their own home loan repayments... uh oh

[Anonymous No.16663894]

>>16663891
Another thing I forgot to mention is that the price of real estate plummeted because banks stopped lending money out of fear, and the price of real estate is linked to credibility more than anything else.

[Anonymous No.16663900]

>interest only subprime adjustable-rate mortgage

[Anonymous No.16663905]

>>16663889
Self-bump

[Anonymous No.16663918]

>>16663872
>>16663890

add margin call
https://www.imdb.com/title/tt1615147/

[Anonymous No.16663922]

>>16663853

back then what happens with a lot of mortgages is they get sold right away which means

the bank that originates the loan does not hold onto it for a long period of time if at all. Bank 1 might give you the loan but almost immediately after writing the note they will turn around and sell the note to Bank 2

because they do not want the risk of you defaulting on the mortgage

Bank 2 buys a lot of these mortgages, combines them together into a basket of loans and sells these baskets to Bank 3 (these basket of loans are called mortgage backed securities)

Bank 1 realizes that since it does not hold onto the loan, the easiest way to make tons of money is to give out loans to whatever fuck walks through the door since they sell the mortgage anyways so if that fuck defaults it's on Bank 2 or Bank 3.

eventually Bank 1 starts giving out really shitty mortgages to people who have no business owning a home. Bank 2 continues to buy and package them together to sell to bank 3

Bank 3 does not realize how bad these MBS are because conventional finance knowledge at the time would say the risk is pretty low generally (for example they assume real estate is local, i.e. if housing market in Houston crashes, housing in LA or NY will probably still be fine) and the risk if spread out throughout all of US since these shitty mortgages are coming from all over. On top of that, ratings agencies like Moody's slap an BBB or AAA grade onto these shit MBSs because Bank 2 needs them to or else they won't be able to sell them to Bank 3, and if Moody's does not then Bank 2 goes down the street to take their business to S&P instead

eventually people start defaulting and Bank 3 realizes how bad these MBS are and shit hits the fan

[Anonymous No.16663927]

>>16663859
tell me about hand
why did the crash need to happen before him?

[Anonymous No.16663941]

>>16663853
Niggers

[Anonymous No.16663942]

>>16663927
http://esotericawakening.com/the-scam-and-how-it-works

[Anonymous No.16663944]

>>16663927
Better tell us how events of such scale aren't foreseen long before and/or carefully preplanned

[Anonymous No.16663952]

>>16663853
niggers wanted to buy homes
niggers applied for mortgages despite
jews gave them loans because they had their home as a collateral
niggers nigged and lost their jobs
niggers went bankrupt
jews took their homes
real estate plummeted because millions of homes were appropriated at the same time
jews couldn't sell their appropriated houses
jews made a massive loss on their mortgage business
oyvey.jpg

[Anonymous No.16663953]

>>16663922

this still happens by the way. After the crash the federal govt took over Fannie Mae/Freddie Mac and basically said "we will buy your mortgages as long as they meet these XYZ requirements"

so the culture of selling the note right away is still present as banks know that they can always sell their shit to Fannie and Freddie as long as the loan is "conforming"

ironically the federal govt has made a shit ton of money off of fannie and freddie and are attempting to re-privatize the companies

[Anonymous No.16664023]

CDS. I would bet 30 bitcoin nobody on this board, let alone the general public, could name the leading mortage CDX in 2007 that had a collective 50 trillion or something insane at peak. Basically FHMLC would just churn money by buying and bundling mortages, which they would then sell for a small profit, and then they would sell CDS on those to banks for a huge profit. Technically they were all risk free returns as long as the funds and banks buying them bought the insurance, so everybody's portfolio had them because of that. The secondary market even was huge, FHLMC could sell these cds on the secondary market back to the banks who had written the loan in the first place.

If you see the problem with this, it incentivized banks to write federally backed housing loans to anyone and everyone, sell that for a profit to FHLMC, then just buy back the returns they wanted anyway in the form of CDS contracts for the exact same loan they had just written, except now with 1/10,000 the risk or however many were bundled. This is why it became systematic really.

Did you know the incarcerated population in the united states has a measured rate of 20% inmates displaying psychopathic symptoms, but top level government officals in the US and Europe have a projected rate of almost as high as 80%? They will never be officially diagnosed, which is why its projected. We have machinetic systems created by people with more self interest then common interest, and it is showing. Wealth distribution in america used to be very linear, not straying far from 20% in each income group, poor, low income, middle, high income, rich. Now we have more of an exponential curve with nearly 50% of americans in poor and low income.

[Anonymous No.16664024]

>>16663853
watch the big short and magin call

[Anonymous No.16664037]

>>16663853
>>16664024
https://www.youtube.com/watch?v=MesrrYyuoa4

[Anonymous No.16664303]

https://www.youtube.com/watch?v=3Ho8y6Xg3SM

[Anonymous No.16664312]

>>16663853
watch the south park episode about it

[Anonymous No.16664352]

>>16664023
This anon fucks.

Nice post

[Anonymous No.16664370]

>>16663863
Some were unable to pay off and when the word spread out they get away without paying the rest stopped paying off too.

[Anonymous No.16664372]

>>16664023
based

[Anonymous No.16664388]

>>16663863
You forgot to mention the mortgage default breakdown by race and the fact legislation passed in the years prior specifically aimed at giving the banks the power to loan without a deposit.

[Anonymous No.16664408]

>>16664023
>doesn't mention the black/hispanic home ownership rates from 70s-now
>doesn't mention the incentivized loaning to unqualified lenders
>Blames the banks
Calc the loaning power of a black/hispanic before Bill Clinton took power then calc it for 2006 and explain the change.

[Anonymous No.16664414]

Suddenly so many anons can explain details of one of the biggest financial happenings in US

>J-just read/watch The Big Short and Margin Call
>B-banks overlending

Damn shills

[Anonymous No.16664426]

>>16663889
This

[Anonymous No.16664457]

>>16663886
What do you need expanded?

Banks were giving out mortgages -- this is a loan to purchase a house -- to anyone. Literally anyone. You could get a NINJA loan -- "no income, no job or assets" -- to buy a house, because housing prices were shooting up and the banks figured they couldn't lose. Even if you didn't pay back the loan they could just foreclose on you and sell the house to someone for even more than you paid for it and still make a profit.

Or so they thought, right up until they realized that at some point the supply of idiots runs out.

But it was worse than that, because they were also financing houses for up to 125% of the "value" of the house. People were using the extra money to buy cars, go on vacations, and eat at fancy restaurants. In other words, they were handed free money and they set it on fire.

Oh, and it's even worse than that, because banks -- notably Bank of America -- were doing this even with ILLEGAL ALIENS. Whose IDs are anything they want them to be, because they just had to give a name to the Mexican government to be handed a "matricula consular" card in any name they wanted. And these spic scumbags were "buying" houses with 125% loans, then using the money to buy trucks and lawnmowers and furniture and appliances and trailers, loading up the trailer, hooking it to the truck, and driving across the border into Mexico, never to be seen again.

https://en.wikipedia.org/wiki/Matr%C3%ADcula_Consular

[Anonymous No.16664483]

>>16664457
Lmao what the actual fuck. You could basically get free money and then get the fuck off america? How big of a loan could you get? $300k? Without job, assets or income.

[Anonymous No.16664559]

>>16664483
https://nypost.com/2008/09/24/illegal-aliens-the-mortgage-mess/

This article cites one case of a fraud ring with 58 mortgages where they were on average roughly $100K loans. But keep in mind that one individual can get multiple fraudulent loans.

Also, people were doing this with HELOCs, where inflated housing values let them extract up to 125% of the home's then-current market price. If they bought it a few years earlier, even intending to be legitimate, and rode the bubble up, they could cash out easily $100K just from a HELOC and then default and jump the border.

My HELOC was for $125K and the bank kept coming after me to refinance it so I could get an even bigger line of credit. Thing was, I didn't need it. Also, I wasn't a scumbag illegal.

[Anonymous No.16664563]

>>16664414
A-are you retarded anon?

[Anonymous No.16665364]

>>16663889
They were too slow and retarded. Didn't realize it had gotten that bad.

[Anonymous No.16665386]

>>16665364
Wrong, they could have, they just chose not to bail them out. Lehman was the symptom not the cause, the crisis was already in full swing that weekend

[Anonymous No.16665396]

>>16663872
>>16663918
absolute brainlets. just watch the "inside job" documentary if you really wanna understand the crisis, not some fucking shitty movies with entertaining shit in the middle so you dont fall asleep like the low attention span brainlet that you are

[Anonymous No.16665401]

Is it possible a similar market collapse will happen in the near future? I need a cheap house

[Anonymous No.16665434]

>>16664457
FUCKING BASED MEXICANS. That's fucking 200iq right there holy shit.

[Anonymous No.16665438]

It's not just banks. The government was incentivizing it all. All for minorities and the American dream of homeownership. They started the bubble.

[Anonymous No.16665510]

>>16663853
Don't believe the official narrative, the real reason for the collapse was due to liquidity problems in the Eurodollar market, yes there was over leverage in the housing market but it really wasn't that big of deal comparatively

[Anonymous No.16665521]

>>16663853
Just watch this https://www.youtube.com/watch?v=bx_LWm6_6tA

[Anonymous No.16665543]

The banks lent money to niggers.
nuff said.

[Anonymous No.16666066]

>>16664408
Oh of course, but that would be a localized and generally small problem if risk premiums had been correctly factored in to the products and treated as such. It only became systematic after risk premiums were artificially lowered past where they should be so banks and pensions could buy huge numbers of these products.

And do not put words into my mouth, at no point in my post did I say I blame banks. They are just playing the game, capitalism is built around turning greed into common good and innovation. If the banks are ever posing a threat to the system it is because the government is not properly setting up the rules for them, or even further it is because the government gives them undue power, such as being able to create money via Fed deposits, making them GSIB's when they are private institutions.

[Anonymous No.16666265]

>>16663853
go watch "the big short" everyone is telling you the plot of the story anyways..
if you don't have the time and don't like big words, then i can offer you the following; you know how index funds work? a bundle of different stocks, you can buy index of almost everything, tech stocks etc.
some of the mortgages were placed in such bundles and were marketed as very low risk, when in fact they were fairly high risk.
Eventually the real value of these mortgages was revealed and banks lost a lot of money because they then decreased significantly in value.

[Anonymous No.16666326]

>>16665396
i watched the movies and i dont really understand the crash, i can maybe recite the reason but i dont really know wtf im talking about.
maybe the documentary would be better but i think your gonna have to read up on economics stuff to really have an idea of what happened

[Anonymous No.16666367]

>>16663853
from a couple months ago

basically there were two really popular financial products, one called a CDO (collateralized debt obligation) and another called a CDS (credit default swap)

a CDO is when you take a bunch of different loans (or at least that was how it was supposed to be) that you own as a bank, package them together, then sell rights to the interest payments on those loans to "investors", buyers of the CDOs, these investors basically pay the principal on the loan and get to collect interest payments among various risk tiers, naturally higher risk of default means higher interest rate, originally CDOs were composed of a diverse basket of loans: mortgage, car, personal, credit cards, etc. but they increasingly became solely built off of mortgages that were lent to people with absolute gutter tier credit, but the credit ratings agencies completely lied about said people's credit and said they were AAA folks, you can see how this looks bad already

naturally these investors want to hedge the risk of default somehow so they purchased another type of financial product called a credit default swap: a CDS allows the buyer to pay quarterly (or whatever the contract dictates) premiums in exchange for default protection from the seller of the CDS, banks and investors were buying fuckloads of CDSs from other banks and investors to hedge the default risk on the CDOs

finally when the gutter dumpster tier credit people (who were lent mortgages that they absolutely 100% were going to default on according to anyone in the know at the credit ratings agencies) did actually end up defaulting, the CDO buyers looked to the CDS sellers for default protection, which they were unable to provide because of the sheer magnitude of the volume of defaults which was enabled by the opaque and kikish ratings agencies, causing mass defaulting among CDS sellers causing them to be insolvent, time to go suck the money out of the Fed's tits for basically free

[Anonymous No.16666381]

>>16663872

I'm a tcp ip developer at a fortune 50 big data company with 25 years experience in database infosec, I've looked into chainlink and all I can tell you if that the cryptographic measures implemented in regards to the decentralized security paradigm in the API and IoT structure of chainlink's github code is fundamentally flawed after the Pivotal tracker server crashed due to the core attacks on the network enabled by its corrupt data inputs and outputs, what this really means is that by attempting to solve the oracle sybil resistance issue it instead allows customers to bypass the encrypted hardware and even hack into the smart contract Intel SGX mainframe, unless they manage to increase the signatures and scalable nodes, which isn't likely considering the Google backend isn't compatible with the legacy JSON systems and Solidity language from the EVM in the Truffle stacks, that's why the ic3 and SWIFT engineering teams developed the ISO 20220 standards but it's centralized and susceptible to the 51% front running program so yeah basically Sergey didn't foresee that the enterprise customers and cloud blockchain dapps would never allow their protocols to rely on these permissioned host mechanisms thus rendering the LINK ERC 677 token obsolete and no serious developer would consider DLT technology in these conditions, sorry linkies I'm just telling it how it is.

[Anonymous No.16666383]

>>16663868
4th post best post

[Anonymous No.16666397]

>>16663952
DEY DINDU MUFFIN NIGGA
AYE YO HOL UP U GOT A DOLLA NIGGA I NEEDS TO EAT

[Anonymous No.16667101]

>>16663853
Banks gave loans to people and then made bets saying they wouldn't be able to pay them back. Eventually everyone defaulted and Banks recouped 0

[Anonymous No.16667181]

>>16663900

They sure do get creative with ways to not say "usury."

[Anonymous No.16667208]

>>16664483
https://www.frontpagemag.com/fpm/2019/03/trump-stops-taxpayer-backed-mortgages-illegal-daniel-greenfield/
If it's paywalled, then try this instead: https://outline.com/Jd933D

> Trump Stops Taxpayer-Backed Mortgages for Illegal Aliens
>
> March 26, 2019
>
> How Democrats are taking the economy hostage to protect illegal aliens.
>
> When Obama illegally implemented DACA, a program exempting certain illegal aliens from government action, they were also allowed to apply for FHA loans. How many illegal aliens obtained FHA loans?
>
> In December, a letter from three Senate Democrats claimed that HUD barred “approximately 800,000 individuals approved for DACA from FHA-insured mortgage loans”. This refers to the total number of DACA illegal aliens and it’s unknown how many of them have obtained FHA loans in past years.
>
> Ellie Mae’s millennial tracker estimated that the average size of an FHA loan to millennials is $186,454. Potential exposure to illegal alien mortgages could then climb as improbably high as $150 billion.
>
> It’s unknown how many illegal aliens have taken out FHA loans, but some media stories have cited loan officers for whom illegal alien FHA loans represent a significant percentage of their business.

[Anonymous No.16667787]

>>16663893
Good synopsis.

[Anonymous No.16668532]

>>16666383
What were they trying to tell us when we were kids?

[Anonymous No.16668571]

>>16664457
It's almost as if a system was subverted and modified by satanists to cater to other foreign satanists!!!

[Anonymous No.16668578]

>>16668571
This pic for context is out of Mexico, 42 real human skulls from sacrifices. A drug den busted by their government only for the judge to release them hours later.

[Anonymous No.16668590]

>>16663889
They wanted to send a message to the retards on wallstreet.

[Anonymous No.16668629]

>>16667208
If fucking beaners create another recession I swear I am going to your border to kill them and I am not even american.

[Anonymous No.16668637]

>>16663853
(((no)))