I don’t recall Mr. Solman mentioning Fractional Reserve practices as a problem, nor did his “experts.” He did say that people borrowed the money, not that the money was created out of thin air by a fraudulent system. In fact, in the beginning of his explanation, he implied that the money “didn’t come from local banks, but foreign investors.” Which is a completely erroneous and misleading explanation of what happened. If he can get this part wrong, then what about the rest…
This is excellent. What is missing is a discussion of the responsibile parties. This administration has had a habit of appointing incompetent administrators to a very wide variety of positions. Examples being the horsey guy in charge of FEMA or attempting to put persons of no competency on the supreme court. The question is what are the competencies of the people who were in charge of this fiasco? Where are the investigations and the indictments? Will there be any?
More than $2.1 trillion of outstanding mortgages have been bundled into securities by private banks,house loans may be sold several times before they land in a security. Mortgage servicers,who collect monthly payments and distribute them to securities investors, can buy and sell the home loans many times.
Bloomberg search under:
Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish
…Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven’t been able to prove they own the mortgages. The confusion is another headache for U.S. Treasury Secretary Henry Paulson as he revises rules for packaging mortgages into securities
11 Responses for "PBS Newshour explains the 2008 credit bubble"
Nice vid. Thanks for sharing.
I don’t recall Mr. Solman mentioning Fractional Reserve practices as a problem, nor did his “experts.” He did say that people borrowed the money, not that the money was created out of thin air by a fraudulent system. In fact, in the beginning of his explanation, he implied that the money “didn’t come from local banks, but foreign investors.” Which is a completely erroneous and misleading explanation of what happened. If he can get this part wrong, then what about the rest…
Would love to see more from Mr. Solman I get it now Thanks to this story
“So the debt chain just kept growing and growing”
A great analogy – it’s basically a global “chain letter”
4 words….Buy Gold and Silver
It’s just like when the banks started giving out loans to buy stocks.
This is excellent. What is missing is a discussion of the responsibile parties. This administration has had a habit of appointing incompetent administrators to a very wide variety of positions. Examples being the horsey guy in charge of FEMA or attempting to put persons of no competency on the supreme court. The question is what are the competencies of the people who were in charge of this fiasco? Where are the investigations and the indictments? Will there be any?
Excellent explanation. Corporate socialism will kill us all.
I’m glad they finally touched on the Fractional reserve nature of the system at the heart of the Problem, and Gearing.
this provides the natural human incentive to proliferate credit.
More than $2.1 trillion of outstanding mortgages have been bundled into securities by private banks,house loans may be sold several times before they land in a security. Mortgage servicers,who collect monthly payments and distribute them to securities investors, can buy and sell the home loans many times.
Bloomberg search under:
Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish
…Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven’t been able to prove they own the mortgages. The confusion is another headache for U.S. Treasury Secretary Henry Paulson as he revises rules for packaging mortgages into securities
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