Crisis explainer

Uploaded by: AmericanPublicMedia
Video Description:
Marketplace Senior Editor Paddy Hirsch gives a bubbly explanation of the intricacies of collateralized debt obligations those financial instruments that got us into this financial mess.

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and why arent these ... ( 2 months ago by jannonymous)

and why arent these investment managers losing their jobs and their shirts? why are they receiving bonuses that come from tax money???

Excellent material. ... ( 2 months ago by jove04)

Excellent material. Well explained. Please make one and name it "Solution Explorer". Does the bail out package solve the problem? What should be the best problem solver even if it is painful for all?

Cheers!! nice ... ( 2 months ago by rfvo)

Cheers!! nice ending.

Nice video. Can ... ( 2 months ago by nsn100001)

Nice video. Can someone explain why the "second manager" would create these securities? It seems that when the bubble bursts they lose 'their' money. Are they paid according to the money they bring to the bank?

could the gcredit ... ( 1 month ago by ciaoidea)

could the gcredit be the solution for crisis ? check the project on YouTube :) TNX 4 video explanation

Very well explained ... ( 1 month ago by oenrilee)

Very well explained, prof!

Hey, gr8 work. ( 1 month ago by yupyupnopenope)

Hey, gr8 work.

Thanks Paddy ( 1 month ago by TENNISCHAMP98)

Thanks Paddy

very clear ... ( 1 month ago by ciaoidea)

very clear explanation. tnx !

A lot of banks and ... ( 1 month ago by kayajosette)

A lot of banks and stuff had bonus systems rewarding innovations. Therefore by creating these secondary CDOs they would benefit from bonuses (hence all the talk abt bonus schemes on the news)

brilliant! i will ... ( 1 month ago by yuk2k)

brilliant! i will share this with my friends, but please get more than 3800 people to watch these videos. 95% of the american people have no clue what is going on in the financial system, and the media does an abysmal job of explaining it to them. the only thing that the public takes away are hot words like "recession," "depression," and "crisis." The bottom line is a fearful reluctance for consumers to spend, and a great discern for bailouts. please keep up the good work.

Looks like a clever ... ( 1 month ago by jsilver41)

Looks like a clever Ponzi scheme. Whoever created it probably left the market long before the bottom fell out.

intricate webs of ... ( 1 month ago by teleutube)

intricate webs of collateralized debt obligations, aka "glass pyramid type" financial instruments... when the scheme collapses...last resort, raid the winery's cellar!

Looks like a very ... ( 1 month ago by floreshasan)

Looks like a very clever Ponzi scheme indeed, but who engineered it? The banks are the only possible explanation but they wouldn't have gone into knowing the consecuences, and we all know how they're doing...

So what genius ... ( 1 month ago by crapo87)

So what genius rated anything in the second pyramid AAA?

Classic ending. ( 1 month ago by rfvo)

Classic ending.

Can it really be so ... ( 1 month ago by Eyesayah)

Can it really be so that the the secondary bottles were really rated at the level of the first. Clearly, it is derived so to be riskier than the first and ought to offer a commensurately higher reward incentive. Else, some folk should be going to jail.

It's the same ... ( 1 month ago by adamas1971)

It's the same geniuses who rate all other debt-related securities, and have been for many decades.

that last comment ... ( 1 month ago by adamas1971)

that last comment was designed to answer crapo87's question.

The slick trick ( ... ( 1 month ago by PaulNancyVan)

The slick trick (crime ?) was the recalibration from BBB or even junk equity status to AAA status on being "re-bottled" in the second magnum. Somebody should be in jail for that piece of fraud.

Cute how these ... ( 1 month ago by plizak)

Cute how these pensions funds manage 100+bn dollars each and they can't hire people smart enough to figure this out... ha ha hah ah ah ah ah a Sucks to be counting on a calpers pension!

Wallstreet CDO ... ( 1 month ago by bartjoebob)

Wallstreet CDO managers
execs knew all along this was a house of cards. Ratings agencies failed to get the right talent in the door
pay a Acompetative salary to keep an analyst on staff who understood these structures. Pensions
asset managers failed to do their diligence
evaluate the underlying structure of these CDOs by simply relying on what the understaffed, uninformed ratings agencies said.

So instead of ... ( 4 weeks ago by goskone)

So instead of holding the responsible party liable we bail them out? Good plan US Govt.

that was the reason ... ( 21 hours ago by AndyHenryUK)

that was the reason for putting different assets into the same bottle in the first place. Bottling bad debt with robust debt and then relabeling the bottle 'contains AAA' was designed to fool people into thinking it was safe money. Ultimately, the people who had been mis-sold mortgages that they could never afford to pay for ended up with a 2-year reduced rate period so that this bubble had a 2 year life-span. Plenty of time for the villains to get their money and run.

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