street. + we connected to these houses i menstrate understand how it started the beginning years ago the rest is a sitting on their pile of money looking for a good investment to turn into british maybe go to the us federal reserve for the invite richard mills believe to be the safest investment in the wake of the dot-com bust in september 11 terrorism chairman alan greenspan lowest interest rates are only one person to keep the economy strong 1 percent as a very low return on investment saudi investors say no facts on the flip side this means banks on wall street ken barlow from the fair bromley general services from japan china middle east and there's an abundance of cheap reading this makes borrowing money easy for banks and vases them to go crazy with leverage leverage is borrowing money to amplify the outcome of the ear works in a normal deal someone with a thousand dollars by the box for 10,000 dollars in soles of the someone else for 11000 dollars per 1000 dollar profit a good deal but using leverage someone with 10,000 dollars would go barrels 990000 more dollars exchange giving him 1 million dollars in here and then he goes and buys 100 boxes with is 1 million dollars and sells them to someone else for 1 million 100,000 dollars then eats his back is 900 9000 + 10000 in interest in after his initial 2002 left with a 90000 dollar profit vs the other guys leverage turns good deals on integrated health this is a major way banks make their money so wall street excel it makes break deals in bros tremendously which olympic event is cs in 10 piece of the action and this gives wall street an idea they connect the investors do the homeowners through mortgage as a family wants a house so they say freedom heyman and contractor mortgage broker the mortgage brokers connect the family to olinda give them a mortgage broker makes a nice commission savannah by the house and becomes homeowners this is great for them because housing places have been raising a forever everything works out my sleep one day you'll never get a call from an investment banker who wants to buy the mortgage sells it to em for a very nice feet the investment better than vase millions of dollars in 5000 more mortgages can put them into a nice little box this means that every man as money comes in which part 3 full first then spills over into the middle and whatever is left in the bottom the money comes from home owners being after mortgages if homeowners don't pay and default on a mortgage less money comes in at the bottom right mean i guess ill this makes the bottom tray riskier mandate at rate safer decapitate for the higher risk the bottom tray receives a higher rate of return what are the top received the lower but still nice return to make the top even safer sex ball insured for a small fee credit default swap the banks do all this works all the credit rating agencies will stay at the top slice is a safe triple a rated investment the highest safest really know it be ok slices triple be so pretty good father rape the risk is life because of the flow reading the investment bankers in silvis a slice to the investors who only wanted safe investments who sells the ok sliced to other bankers and rescue slices to hedge funds another ristic makes millions event we pay as long as i leave the investors of found a good investment for the money much better than 1 percent treasury bills there so pleased they want more cdo slices saudi investment banker cause of the linda wanting more mortgages the lender halls of the broker from our homeowners but the broker can't find anyone everyone that qualifies for a mortgage already has one of the an idea when homeowners default on a mortgage the lender get to the house and hauser always increasing in value since the cupboard of the homeowners default letters can start adding risk the new mortgages not requiring down payments no proof of income and that's exactly what they did so instead of letting to responsible homeowners called my mortgage is this today get some that work well less responsible vis are subprime mortgages this is the trainline so just like always the mortgage broker connects the family with a blender and a mortgage making is omission the family by the big house vendor sells the mortgage be investment banker translate into a cdl excel slicers to the investors and others this actually works out nicely for everyone or which no one was worried because as soon as they sold a mortgage do the next guy it was his brother if the homeowners with a default didn't care wrestling are there within the next guy in making millions wife playing hot potato with a time bar not surprisingly the homeowners the fault on a mortgage with this moment is on by the banker this means he forecloses on what are the monthly payments trends in the warehouse no big deal you put it up herself but more more of his monthly payments canada houses now there so many houses for sale on the market creating more supply than there is demand in housing prices are rising anymore in fact big one this creates an interesting problem for homeowners still paying the mortgage has all the houses in the neighborhood go up for sale the value of their house doors down he can't get rid of it but he's not the only one the adventures of already ba1505 natural system is frozen and things everybody starts going bankrupt but that's not all the investor cause of the homeowner and tell him that his investments are worthless and you can begin to see how they crisis flows in a cycle welcome to the crisis of credit reduced enslaved advance insurance companies sovereign funds mutual funds etc insurance companies sovereign funds mutual funds
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