090227 credit crisis
TRANSCRIPT
Credit crisis
...in 7 minutes...
BANK
3% 6%
profit
the “good old days”
“flat world” capital market1 mln 6%
60.000
4%
1.5 mln
3%
Freddy & Fanny
... how to raise profits???
sell at buy at houses
saved 6.00% 4.00% 200,000
1,000,000 60,000 1,500,000 8
5% 90,000 2,250,000 11
7% 135,000 3,375,000 17
10% 202,500 5,062,500 25
15% 303,750 7,593,750 38
23% 455,625 11,390,625 57
...more housing loans!
...more expensive houses
...new owners
.. but, what if they cannot repay?
.... we just sell their house!
Deutsche Bank in Cleveland
Cause > effect
Bad loans ↑ → Failure to pay ↑ Repossessions ↑→ Supply ↑ → Price ↓ → Lehman, Freddy, Fanny, etc could not re-pay their debt → ....
+/- $1..TRILLION lost....
2007-10-09 2008-09-12
Wave hits Japan
JP
CHN ME
financial sector > real economy
What happened?
Solution?
BAILOUTS?..... brings money back into the same system....... restores the MADNESS
Conclusion .....
Bubble built on belief that (housing) prices would never go down...
Financial world is 'flat' & greed is a global phenomenon
Next bubble is just around the corner...