Nil General Online How To Explain This To The General Public, In Layman's Terms?

How to explain this to the general public, in layman's terms? - nil general online

The explanation of the credit crisis (by Ben Stein)

The crisis has occurred) to simplify (clearly, because the system enables financial institutions to Paris, whether the mortgage was paid never occurred. You still have to make a mortgage to Paris. These paris, called credit default swaps are complex. But in sum, that someone will benefit immensely - surprisingly - when a large number of subprime mortgages are not paid and subsequently allows.

The benefits can be fully combined in proportion to the actual number of defaults, because speculators can reduce the price of instruments for the subprime mortgage beyond what was the actual rate of loss. As I said earlier, the advantages here is beyond imagination. (In fact is May so large that one wonders if the whole subprime fiasco was not created solely in order speculators profit wildly on its collapse ...)

Credit default swaps written written credit was (like insurance) is as private contracts. There is no government regulation of them. Who writes these policies? Banks. Investment banks. Insurance. Now, should the buyers of credit default swaps on junk mortgage debt trillions of dollars. This responsibility is the abyss of the responsibility for the financial institutions in America.

As these companies never dreamed that the financial giant subprime securities as they fall, not a potential liability for these CDS policies give you somewhere near their true liability - which could in turn, is almost bottomless. You do not have a countervailing asset to pay the debt.

That would never happen. Now, that has already occurred, should the taxpayers pay for speculators millionaires through its paris? What the hell are we to do?

2 comments:

chebrew2... said...

Ben Stein is wrong. This was not the financial system, over-regulation has the Democratic Congress for mortgage banks to people who can not afford to give it! It started with Jimmy Carter and Bill Clinton to be respected. Ten times since 2003, Bush and other Republicans tried to keep the laws appear to this disaster, if you pass committess OverSite of Fannie May and Freddie Mac, trying to become too big and had to provide too many financial risks. They were beaten by a majority of Democrats in Congress, Dodd, Frank, Pelosi and Gorelick, to name a few. Poo pooed all the Republicans and Bush and the 10 bills won. But here we are 5 years later. Free markets and banks were doing alone (laizze), loans to people who could afford it, I would have done very well without government intervention. Now we have taxpayers on the hook for one billion! That is the truth!

Extra Ordinary said...

In regular speak, get "greedy people with cheap money"

Post a Comment