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BobBobson

Excellent Illuminating Videos On Economics, Bail-Outs, House Price Crashes Etc.

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I found a utterly brilliant website where a guy provides you tube videos that explain all the perplexing economics issues brilliantly and lets you see how all these things work in a very clear manner. I have watched the following video Playlists in the order below, which seems to me like the correct order in whcih to watch them. For anyone who wants to gain a good solid grasp of economic/investing matters, then these are essential self-education:

Banking & Money

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the Khan Academy is Ace.

in the video you put up, the reality is somewhat different.

bankers didnt lend to entreprenuers in the green box...or take money from savers in the yellow box.

what they did was take seed investment cash from bondholders ( yellow box) and lent it to house purchasers (green box).

they then disposed of the loan to another bank, who now has an investment in the bank, while the bank itself lent that new money to another house purchaser, which they then sold to another bank, while the bank itself lent that new money to another house purchaser, which they then sold.....

meanwhile, in the investment banking world, the mortgages which the first bank sold are now securities, which the investment banks bundled up into safer than gilt and paying out more, to pension funds and local authorities.

so you can see that interest is booked on a whole chain of "investments" which somehow add up to more than the house purchaser was paying for his loan from the original bank.

hence, to keep this lot afloat, banks had to pass lumps of cash between each other in the form of loans in the shadow banking system faster and faster, until one day, in 2007, somebody realised that the bank they were thinking of lending yet more millions to, maybe had a default or two on their lending books....the money conveyor stopped...and hey presto...a "liquidity crisis".

the fact that many banks on this merry go round were insolvent was ignored. so they enabled banks to LIE about the value of the mortgages, and they enabled investment banks to trade in their CDOS to the FEDs at near par....all so the merry go round could continue.

and thats where we are now.

the debt remains, the conveyor is now just circulating on slow, mortgages are scarce, but the cash flows in via QE and other mechanisms so bankers can keep paying their bills and bonuses.

the insolvent remain and continue to drain our economies.

Mr Khan does go into the CDOS and CDO squared in other lectures.

another video you may want to look at is the BUST phase of the Austrian business cycle. 1 hour, predates the crash, but seems eerily precient.

http://video.google.com/videoplay?docid=-2382683217626362775&q=krassimir+petrov#

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the Khan Academy is Ace.

in the video you put up, the reality is somewhat different.

bankers didnt lend to entreprenuers in the green box...or take money from savers in the yellow box.

what they did was take seed investment cash from bondholders ( yellow box) and lent it to house purchasers (green box).

they then disposed of the loan to another bank, who now has an investment in the bank, while the bank itself lent that new money to another house purchaser, which they then sold to another bank, while the bank itself lent that new money to another house purchaser, which they then sold.....

meanwhile, in the investment banking world, the mortgages which the first bank sold are now securities, which the investment banks bundled up into safer than gilt and paying out more, to pension funds and local authorities.

so you can see that interest is booked on a whole chain of "investments" which somehow add up to more than the house purchaser was paying for his loan from the original bank.

hence, to keep this lot afloat, banks had to pass lumps of cash between each other in the form of loans in the shadow banking system faster and faster, until one day, in 2007, somebody realised that the bank they were thinking of lending yet more millions to, maybe had a default or two on their lending books....the money conveyor stopped...and hey presto...a "liquidity crisis".

the fact that many banks on this merry go round were insolvent was ignored. so they enabled banks to LIE about the value of the mortgages, and they enabled investment banks to trade in their CDOS to the FEDs at near par....all so the merry go round could continue.

and thats where we are now.

the debt remains, the conveyor is now just circulating on slow, mortgages are scarce, but the cash flows in via QE and other mechanisms so bankers can keep paying their bills and bonuses.

the insolvent remain and continue to drain our economies.

Mr Khan does go into the CDOS and CDO squared in other lectures.

another video you may want to look at is the BUST phase of the Austrian business cycle. 1 hour, predates the crash, but seems eerily precient.

http://video.google.com/videoplay?docid=-2382683217626362775&q=krassimir+petrov#

I also agree that Mr Khan deviated somewhat from reality in his banking & money video sequence, but it was intended as simplified abstract example to enable practically anyone to get a grasp of how the whole system functions.

The rest of what you explained was covered in the other video playlists that I wanted to post, but the forum wouldn't let me do more than one. Then when I went to add the reply, I couldn't cos my post was awaiting moderation. So here are the other playlists:

Credit Crisis:

P.S. your video link to the Austrian BUST phase of a bubble economy doesn't work.

Edited by Retardstic

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and finally.

The Bank Bailouts:

From this video (above), it becomes very clear why the financial establishment cannot afford for a property price crash to occur. Artificially high property prices are providing the support structures for the whole corrupt parasitic financial system and if property prices cave in, then the whole of the status quo financial system collapses in on itself, not unlike the way the Twin Towers, a symbol of American economic power (also prime real estate that wasn't quite so prime as it seemed) came crashing to the ground back in 2001, around the same time that the ball was set into motion for the collapse of these other towers of financial power.

There are also a great deal more videos on a lot more economic/investment related topics which can be found on the guys homepage:

http://www.khanacademy.org/

Edited by Retardstic

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Try this link for the vid - it's well worth an hour of anybody's time.

edit - and thanks for the Khan stuff - just watching at the last one now.

odd, but on my firefox browser, my link creates a video into the site...just press the play button.

I appreciate what Mr Khan was illustrating, and how banks should work.....He goes into lengths in his bailout, MBS and CDO vids to explain what happened to them.

He had another vid some time ago about banking with a view to the circulation of money...

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I appreciate what Mr Khan was illustrating, and how banks should work.....He goes into lengths in his bailout, MBS and CDO vids to explain what happened to them.

Here's another one he did on the economy.

Brilliant use of a cucumber.

Surprisingly eloquent Gordon Brown supporter at 2:15.

Edited by Jehovah's Waitress

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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