the credit crisis - the us economy horror picture show
DESCRIPTION
The US financial crisisTRANSCRIPT
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The CreditCredit Crisis“the US economy horror picture show”
by Ryan A Graves October 2008
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It used to be...
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Get a loan from your loan officer (simple)
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People buy homes with good credit
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Then...
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Banks begin lending to people with BAD CREDIT (ARM) – Adjustable Rate Mortgage
NO PROBLEM
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Banks promised that housing prices will continue to rise.
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Banks start selling MORTGAGE BACKED SECURITIES*
*Investments of packaged home loansThese are fine if the housing market goes up...bad if it doesn't.
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2001 TECH SELL OFF
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9/11 shocks US and world economies
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Fed drops interest rate to
1
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Investors buy lots of mortgaged backed securities ...with very high fees
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Real estate soars 10 – 20% from 2002 - 2006
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Home owners spend like celebs using Home Equity Loans
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Credit Bubble Housing Bubble Credit Bubble
So this happened...
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Fed increases interest rate to
5.25
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Adjustable Rate Mortgages increase with interest rates
HomeOwners can't pay their mortgages
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Home owners are forced out of their homes
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Past Due sub-prime mortgages rise to
18.8% in 2008
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Estimated bank losses
$500B +
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Wall Street banks go under
FAIL FAIL FAIL FAIL
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And now?
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US Government digs deep to bailoutbailout the large financial institutions
to the tune of...
$750B +$750B +
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Neither presidential candidate really has a clue what to do...
Lets hope this thing works!
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THANK YOUTHANK YOUsee more at see more at
http://ryanagraves.com
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