October 30, 2008
Sub-Prime Fiasco -The Best Explaination Yet
A friend sent me the below link that explains the sub-prime mortgage mess about as well as any I've seen. Fair warning though, it contains obscene language including the well known four letter words beginning with "F" and "S" but in this case, the language is appropriate.
Click on the blue words below:
explaining the sub-prime fiasco
clearfogblog
Posted by warrenpeterson at October 30, 2008
10:02 PM | Email This
1. Warren, this has been going around for months and it's pretty old (true though). A less known version is this by some pretty funny guys from the UK.
http://www.youtube.com/watch?v=mzJmTCYmo9g
2. Dude, I posted this at HorsesAss like a year ago.
3. Good to see that Jim Miller took a shot at drawing a cartoon strip afterall...
4. Like other comments I had seen this bit some time ago. Dutch's U-Tube bit is even better! It gives an appropriate bashing to mortgage seekers who couldn't afford them and to the financial industry for inventing and selling irresponsible instruments. But it ignores the the actions and inactions of the Federal government over the past 3 decades which set this all in motion, enabled it to continue and when things were going south did nothing to reign it in. The Federal Government, particularly the Congress, gets fully 50% of the blame for this situation, in my opinion. And now they are going to hold hearings to determine blame- the arsonists playing arson squad!
5. One of the better explanations ties the creation of the derivatives market to the migration of math wizards to Wall Street during the 1990's.
These guys, who had until then worked mainly in the physics world, lost their jobs due to government funding being re-directed away from things like super-colliders to climate modeling.
They then turned their substantial math skills to market trends and created ways to model and exploit them that regulators and even banks couldn't fully understand.
Like all models though, these ones involved simplifications of the real world things that created the trend. One of these simplifications was that real estate prices always go up.
Ooops.
6. Thanks, warren.
7. Deadwood: Great observation about the math heads screwing up their models during the 90's Wall Street.
I wonder if they started working on the Global Warming models after screwing up in the financials?