The Crisis Of Credit Visualized

hello ats, Wow this is a nice way of visualizing the whole credit crisis and how it went down ... it's only 10 Minutes! long with both video's combined ... if you watch it let me know your opinion of the videos ... whether they hit it right on or they missed something ... imo i think they hit it right on the money





[edit on 20-2-2009 by baseball101]

That was a great presentation. We are all screwed.

reply to post by baseball101


wow thanks for posting. that really helped me understand things MUCH more clearly. glad i'm renting at the moment.

Nice simple way to get the point across to people who have NO idea whats going on

But i personal Prefere the Chris Matason "Crash Corse" as its more in deepth

reply to post by TreX-UK


yes the crash course is indeed more in depth , but it is also 3 hours and 20 minutes long i just posted this for a, as you said, simple explanation of what's going on ... it's short sweet and to the point

Nice presentation!

Can you guys help me out with this then:

I live in Stockholm, Sweden. Crisis hasn't struck us with full force just yet. It will come, I know. But we do have the advance of surplus in state funding.

I bought my apartment back in 2005.
Price tag then: SEK980,000 or $108 683.6

I took a loan, without down payment, all 980 grand, and I got a crazy low interest rate on it.

At most it has been worth SEK1,525,000 or $169,124.99
That was a pretty nice profit, but I didn't sell.
(My idea is that in time this top note will be matched, maybe even exceeded some time in the near future)

Since then, interest rates have been going up, but now they are declining again. Our State Bank, or "Riksbanken" has lowered its interest rates to 1%

Earlier, last year, I tied up my interest rates for the coming 3 years to a pretty OK rate. Not as low as it used to be, but still lower than when it peaked. My expenses for the loan, however, has risen with roughly SEK1000 or $110.9 monthly. That kind of blows, but I can afford it.

Rates are at the present falling steadily, and I did at first curse myself for not choosing to have a "moving" or "unfixed" rate. That would make me reach even below the rates of my initial loan.
Still, my guts tell me I did the right thing.

Now my idea is that inflation will come, and it will come hard.

I think that inflation will make the interest rates go up. This since banks see that people have "more" money, or at least, bigger numbers on their pay checks due to the money losing value. I can see that once this is in full orbit, people will seem to earn enough each month to buy "loose" their homes.
Thus, banks will rise their interest to cosmic proportions to try make some profit out of it.

For me, on the other hand, with my rates fixed for another three years will make a nice deal out of this since inflation will make my payment almost pointless.

Now, this is too good to be true, I know.
But I have a hard time figuring out the true meaning, for me personally, with the entire crisis.

Let's say that the loan-crisis will be just as severe in Sweden as it is in the US, as it most probably will be.

What will happen to me and my loans you reckon?
I don't want to go ask the bank because they will certainly not tell me the truth if it involves something that does not turn into their profit...

Thankful for any help.


[edit on 20-2-2009 by Raud]

Pretty good presentation. Clear, to the point, and all the important stuff is included.

I would say just 1 more thing on top of what was said. Part of the problem is that there was an incredible amount of money to lend to all these would-be homeowners, which couldn't exist if banks weren't permitted to create money out of thin air. As long as banks can find someone willing to go into debt, they can loan them newly created money. Take this possibility from them and the problem would have been much smaller.

Otherwise, A+ presentation.

S+F - I have just been watching this on Vimeo in HD...

vimeo.com...

Great.

WoW! Nice graphics and... well storytelling.
I wonder when they will do this kind of film with NWO for dummies.

This video does NOT address the role of government intervention, which in my opinion, was the driving factor behind the sub-prime loans.

reply to post by Raud


Howdy,

Although it's great to have a fixed rate loan on your apartment, your repayment will only become "cheaper" if your pay meets or exeeds the rate of inflation. Otherwise, increases in everything else you need to buy each month-- food, etc- will leave you worse off than before.

Inflation is a tricky number to track, because governments (the US especially) tend to lie like crazy when reporting it. Inflation is caused by one thing- overprinting of money. Anything else is temporary supply and demand. If you're being paid in the currency which is inflating, then you're in the same sinking boat as everyone else.

While living in Venezuela, I saw a period of high inflation, but I was paid in US dollars, and was unaffected by the sudden loss of buying power of the local currency. Post-crash, I could buy twice as many bolivars (their dollar) as before. Problem was, merchants raised their prices to reflect the higher inflation, and even padded things above that as a safety margin. So there were no 'deals' to be had even when buying in US dollars. The only people who win in an inflationary period are lenders holding variable rate credit, and those with hard goods such as gold, silver, or other commodities.

Regarding your situation, I wouldn't expect to become immediately rich once inflation has eaten away at the cost of your mortgage payment. My mother-in-law in Venezuela still lives in the same place she bought in the 1970's when the Bolivar 2-1 to the US dollar. Today it's something like 5,000 to one but her place is still worth about the same in US dollars as it was nearly 40 years ago (which is to say 'much less', given the time value of money). Location, desirability and quality of construction are probably a better indication of the future value of your home. But that said, if our financial tsunami has not yet hit Sweden, then you may be better off liquidating for a profit now, investing in commodites and renting. Your portfolio may well increase beyond the rate of inflaton, giving you greater purchasing power than you now have.

What it comes down to is-- how long do you have to work to obtain 'x' dollars that will buy 'y' products? If you knew your money (or equity tied up in your apartment) was going to be worth 20, 30, or 40% less next year, what would you do today? Ideally, sell it and buy something- anything-- that would not depreciate as much, right? Hope this helps!

I live in France and troubles have started already, in Guadalupe for example, people are revolting, burning cars and even shooting at policemen. On the continent, factories are closing and thousands of people are going to lose their jobs , especially in the auto sector , and other sectors are firing hundreds of employees to save money because of the crisis ...

Our president keeps telling us that the crisis will be defeated thanks to blah blah blah propaganda to prevent us from going in the streets and set this country on fire . But I don't think people will stay home this time, we expect something big in here . I hope you'll make something big in the U.S too because it's going down everywhere ...

And sorry for my poor english skills

God bless u !

[edit on 20-2-2009 by Asset1911]

The beast speaks
www.reuters.com...

Soros sees no bottom for world financial "collapse"

Thank you !! It helps me to understand how greedy and stupid some people are.

@h5mind

So what you say is: sell to the maximum profit and then buy something that does not suffer the global crisis. This would then mean precious metals and such.

Have I understood you correctly?

I turn to ATS for serious help consering macro economics due to the banks tendency to lie so eternally over this.

Please give me some more inputs on this!
I am achin' to hear some oppinions!

Peace, and thank you in advance.

I found and watched this the other day and did a search to see if it had already been posted.

This didn't get anywhere near enough attention as it is deserved, it is the best short video to explain the crisis I have seen. I am working on putting a thread together and I am going to use this as a starter, If this quick 'bump' dosn't do the trick I will be sure to reference your thread