What exactly happened during the 2007-2008 financial crisis? How did it affect you personally?

What exactly happened during the 2007-2008 financial crisis? How did it affect you personally?

Attached: 1_YtwbhAlx3zgpHPkpc2V4jg.png (2000x1500, 3.41M)

Other urls found in this thread:

en.wikipedia.org/wiki/Inside_Job_(2010_film)
en.wikipedia.org/wiki/Savings_and_loan_crisis
twitter.com/NSFWRedditGif

People will give you all sorts of complicated explanations, but it was essentially this:

People who shouldn't have been given mortgages were given mortgages. That's it, end of story.

i lost about $40k
i am now immune to justing in crypto

Great oversimplified explanation dipshit

Back to r*ddit faggot

Basal II forced capital requirements created a bubble in the housing market. Banks shorted themselves because they knew the mortgages that they were legally required to hold a certain percentage of their capital in were not worth shit and they knew the government would bail them out

people get mortgages, banks sell mortgages, bigger banks buy the mortgages, insurance companies bundle them up, people lie about how likely people are to pay them back and gamble on bundles of subprime mortages and boom instant crises.

He's right tho. You can go into detail about why and how it happened, but that was the core of it.

+ the insane and absurd amount of financial products that have resulted from that

I like the part where you contributed less to the thread than the guy you are whining about

He's 100% right

people didnt lie the banks just gave it to them no matter who you were

Personally I got hired just before the bust and spent three years being treated like shit because there were hundreds of grads who’d take my job in a second

Ten years later and there’s a shortage of lawyers my age so I can name my price

T. lawyer

>insurance companies bundle them up
no they don't, banks do.

>(((financial products)))
this talmudic degeneracy shouldn't be allowed

Attached: (((they))) dont really care about us.jpg (1024x768, 1014K)

Neither should tax-exempt religions

who the fuck is sitting in the background

Short answer: Banks assumed (unknowingly) that mortgages not being paid back are uncorrelated. This turned out to be wrong, because adjustable rate mortgages all went up at once, and everyone couldn't pay.

People assumed mortgage failures were not risky because they diversified the risk. The exact structuring of the mortgages is more complicated, but that's what it boils down to. If you don't understand what you are buying, you are going to go for a ride.

I was broke so I noticed nothing. My now wife bought apprtment in 2008. Sold it in 2013 for 7x the price.

Thats the consequence, the cause was cheap money.

Some shit went down
It didn't

Businesses used it as an excuse for their bad business practices in 2008-2011. People complained there was a recession going on while driving around in their gas guzzling SUVs and living like royalty.

en.wikipedia.org/wiki/Inside_Job_(2010_film)

Veeky Forums will predictably put this film down.

The financial sector turned out to be run by total retards who didn't understand their jobs properly. Rather than let them sink like they should have, everyone else had to pick up their tab.

>This turned out to be wrong, because adjustable rate mortgages all went up at once

Thats the consequence, the cause was cheap money.

On the lead up to the financial crisis, there was a housing bubble in the US (notably in places like Florida, where many risky adjustable rate mortgages where actually being made).

Many people who shouldn't have gotten those mortgages got them anyway because there was an assumption that housing prices would just continually go up, and even if interest rates went up, they could just refinance their mortgage on the basis of their house having gone up in value.

Interest rates increased at a time when the housing bubble was starting to burst. People, who shouldn't have really been given adjustable rate mortgages in the first place, now found themselves unable to refinance their mortgages, and had their rates go up to shit like 200%. They just stopped paying and left their homes.

Delinquencies on loan repayments were already going up before interest rates increased, but everything really fell apart once they did, in combination with the housing bubble bursting.

Just watch The Big Short. Very entertaining movie and it gets most things right, the important ones anyway.

Attached: The_Big_Short_teaser_poster.jpg (220x343, 20K)

oh and to answer your second question, I saw it coming after that Greenspan speech that there is no bubble, sold my house in NY and moved back to europe

>go up to shit like 200%
sorry, that was meant to say, their rates would increase by shit like 200%

So are student loans going to repeat this so enough? We all know kids shouldn't be paying 100k for gender studies degrees.

As long as loan failures don't all take place near each other in time, there can still be a somewhat steady flow of money to lenders.

When there is a sudden lack of money inflowing to lenders, then a problem results for the entire economy.

I was in Australia, everyone lost their job, me and all the other apprentices got to keep ours. Then the government gave everyone $1000 to spend (no joke, stimulus package)

Well IBR has a waiting period of about 20 years I think and I doubt any of these kids will be able to pay by then. Most of them are on 0$ or very reduced payments, hoping that they will be forgiven. Most of them aren't even attempting to pay at all.

Education pricing, itself, is what should be examined to try and make sure Universities aren't just pumping it up to unreasonable amounts. I think that would be one the first things focus and to limit further future problems.

Watch the documentary "Inside Job."

can someone explain to me what is a mortgage? is it only a murican thing?

More people use them but the amounts are lower. They could realistically just absorb the losses but it will still a bloodbath though.

Banks over leveraged about 50x

Prop desks at these banks were trading very risky securities comprised of mortgages (Synthetic CDOs, CDOs, Swaps)

When these securities went to shit due to the defaults across the country the securities were worthless.

Obviously allot more complicated and more factors but go watch "inside job", or watch "The Big Short"

You guys are all fags. It wasn't just morgages. It was peak greed. Mba's trying to outsource everything to the chinks. Both parents had high paying jobs and degrees and got fucked. Then no jew will hire them cause they're too old.

Our employment never recovered. 2007 was the deathbed for made in america and ushered in nothing but spreadsheets, burgers, and consumerism. 'Designed in california' what a fucking joke.

Attached: C9C2D91B_A750_444B_8F61_8C82EDB5FF0F.png (315x700, 166K)

I would say that the problem is less that universities are overcharging and more that, much like with homeownership, demand has been pumped up ridiculously high. Currently we have a situation where high schools are promoting every brainlet getting a bachelor's degree to the extent where it has become a de facto new HS diploma, rather than something sought only by the upper middle class and up.

That doesn't make sense - the banks that got into the biggest trouble (like Lehman) were not "retail" banks, and therefore didn't originate any mortgages. The only way for them to have CONTACT with the mortgage market was through VOLUNTARY securitization.

We don't know. The main securitization vehicle for American student loans is something called a "SLABS" (a student loan asset-backed security), but the market for those things is super-opaque.

2008

got my inheritance cause grandad killed himself

>Low-interest rates leading to cheap money
>(((Banker))) greed
>Gov't initiatives to give everyone a home, regardless of income
>Create insane regulations so no one could ever start a bank or investment firm ever again
>Bail out the banks and don't punish them, creating a moral hazard (that the gov't will bail them out again and again, they're "too big to fail")
>Letting Keynesians unironically run your fiscal and monetary policy
>Then after they crash that economy, never remove them from power

Just Keynesian things.

>How did it affect you personally?

Became a lolbertarian. Still kinda am. But gave up all hope on America at a ripe, young age. Realized that if we're going to be a bubble economy, I better get the hell out of dodge. Make my money and run.

I think no matter what lies the gov't tells people, things were unironically way better pre-2007. It's getting so bad, things seemed like they were better in 2009. The unemployment and underemployment is nightmare fuel in this country. Get rich or die trying is my new motto.

>tfw you pay 100k for american educayshun
>you pay less than 5k usually for all your semesters of university in middle europe

jesus, you guys are getting fucked over, I'm not even laughing at you that is legit horrible you need to depose all of the retards in your government like right fucking now

Attached: image.gif (500x275, 365K)

>housing market started to crash
>housing prices went down
>people stopped taking money out of their home and buying shit so the economy tripped over itself
>people stopped buying cars
>car salesman stopped buying luxury goods
>companys stopped advertising as much

People who say it only effected housing prices were most likely just not apart of the system. I have friends who said it didnt effect them, but they were all essentially neets with no income so its like of course it didnt effect them.

I lost a lot of money on stocks, real estate, income from ad revenue.

Mohammed thank you for not laughing but not all of us are retarded enough to take loans for school or get gender studies degrees

im 29 and make excellent money and have never paid a dollar of my student loans, looking back it wasn't worth what I paid for, my major was the smallest department and got a 30k a year budget, so essentially my fees went 2 everyone else. nah fuck that ill call every 3 months until I die stating that Im unemployed or in the hospital or something.

should also mention I had a 250k hospital bill, the emt took me 2 the most expensive hospital in the u.s.a they had people comming in showing me how 2 do a bicep curl and charging me $800 for it. so I literally told them they are getting nothing, It was an in and out thing that would have costed 15k in any other hospital, you get what my insurance pays for and thats it. never heard from them again. think my insurance only covered 25k of it.

>3 parenthesis opening
>only one closing
>autism intensify

Thanks to it now I know how the fucking GOVERNMENT bailed out the banks.

What makes you think the government isn't gonna do anything in its power to ensure their prosperity and longevity?

That's why I'm getting as much XRP as possible.
Oh and Santander, BBVA, American Express, Moneygram, Western Union, Sbi... the list goes on.

How many of your loved shitcoins do actually have a use case. What shitcoins are being used to such fucking levels huh ?

>turn 14 in fall 2007
>wanted to get job for a long time
>market tanks
>no one is hiring
>go town to town, building to building, looking for work

4 months of this shit and it got me work at the shittiest job i ever had. it took another 4 months of this shit to get my first OK under the table job.

eventually i got good at finding jobs. one time i had an orientation for a convenience store job with a guy who was a sr. systems engineer for a reputable company. in that sense, i think it was better to have a rough start than a late surprise like that. everyone was everywhere. overqualified people were taking the most basic forms of work available.

No. Student loans will contribute to the next crisis but they are not a bubble

Didn't derivatives cause it?

Aus is in bad shape now mate dont get comfy

I remember I was like 15-16. My stepdad, who made most of his money selling weed and fixing cars under the table, suddenly started to make a bunch of extra money by cleaning out the houses of middle-class idiots who were getting foreclosed on, and reselling all the random furniture and other stupid trinkets that they were basically giving away. I remember I was helping out a lot during yard-sales

We were too poor to really lose a lot during the crisis, but I gotta hand it to the guy, he was pretty clever. It wasn't just institutional short-sellers who were able to profit from the crisis.

this movie was probably the most honest in depth explanation of the financial crisis

Basically the affordable housing act forced banks to service poor people who wouldn't payback loans. Then they hid the shit loans in bundles with good loans. Then the poor people started defaulting on their loans and we had more foreclosures than ever

The only people who pay for college are the retards who couldn't get scholarships.

What banks out of that list got bailed out?

Homes got really cheap. Waiting for next crash so my generation can finally afford a home. (Millennials). Shit is x3 what they should cost right now.

borrow money to buy a house

in germany for exmample, they're called hypotheke. so not just murrican thing, but americans do really seem to enjoy borrowing money a lot for some reason

"What exactly happened during the 2007-2008 financial crisis?"

The confluence of two dangerous developments: low interest rates in the early 2000's and the deregulation movement, which began in the 1970's. Low interest rates make borrowing cheap and make safe saving (CD's etc.) unattractive, so personal debt rises and personal savings rates decline.

Houses are bought mainly with debt (long-term mortgage), low interest rates encourage the purchase of houses, and because the stock of housing expands only slowly, an increase in the demand for housing leads to an increase in their prices. Low interest rates, by stimulating economic activity (people borrow to spend), tend to increase stock values, so people tend to buy common stock in lieu of safe securities.

Thus, low interest rates, people's savings increasingly take the form of pricey houses and pricey stocks - and rising prices convince people that houses and stocks are good investments.

(1/n) can continue if would like more technical aspects

Attached: 20180318_PersonalSavingsPercentageDisposableIncome.png (1168x470, 61K)

Murican real estate

lol

or just join the military :3

Fuck working for someone. Open your own firm. You will never look back.

These bubbles of epic proportions can only happen with free fiat money, and with the state of things now cant wait for the next correction, dis gon be gud lads.

Attached: 1450605901388.jpg (440x200, 8K)

When is the next financial crisis in your opinion?

Yeah absolutely. Any thoughts on the current state of the market?

I keep telling you idiots 9/11 was a fucking inside job

Also Boiler room was so fucking good

>government
You mean the good fellows over at the Fed? The Fed is not controlled by the government. They distributed the bailouts to each other's banks and corporations. Nothing to see here goy.

(2/n)

The demand for credit is met primarily by financial intermediaries, by companies - classically - commercial banks - that borrow from one group of firms or individuals and turn around and lend the borrowed money to another group. To make a profit the intermediary must pay a lower interest rate for his borrowed capital than he charges for his loans. As a practical matter this requires him to offer safety to the persons he borrows from and to assume risk in the loans he makes. This is typically done by borrowing short and lending long. A person will charge a low interest rate if he can quickly get back the money he has lent, because there is less risk of losing it and it gives him greater liquidity (ability to put ones hands on cash when needed). He will charge a higher interest rate for the long-term loan because it will not be liquid and because something untoward that might cause the borrower to default is likelier to occur over a long period of time than over a short one. Banking thus is inherently risky. If a bank experiences a lot of defaults on its loans, its creditors - the persons who have provided it with short-term capital - will become anxious and yank their money.

The inherent riskiness of banking, and the importance of credit in a commercial society, led to strict regulation of banking, producing a system in which banks' principal capital consisted of demand deposits that banks were forbidden to pay interest on. With this cheap source of capital, banks could make a profit by making short-term loans rather than long-term loans and thus were not at high risk of loss in their loan portfolios. Federal deposit insurance capped safe banking by making depositors unworried about such losses.

Attached: 20180318_NonperformingTotalLoans(pastdue90+plusnonaccrual)toTotal Loans.png (1168x470, 43K)

Poor short-term memory is probably to blame as well, seeing as nobody at the time seemed to have learned from the S&L crisis of the eighties.
>it was like the same fucking thing happened more than once
en.wikipedia.org/wiki/Savings_and_loan_crisis