The Dynamics of the Credit Crisis (Things I'm Interested In, Installment #9)

I saw this video over at Tony Jones's blog The New Christians.

I've been asking the business faculty to take some time and educate the rest of the faculty about what the heck is going on in the economy. Self-educating, I pieced together most of the puzzle. But this video really ties the pieces together. After my wife watched the video she said,"Now I know why someone bought our mortgage a few years back." A couple of years ago we got a notice in the mail that our lender had sold our mortgage to a bank. No big deal, we just had to pay a different institution. It's clear now that a bank bought our mortgage and bundled it with others to sell to investors.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

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4 thoughts on “The Dynamics of the Credit Crisis (Things I'm Interested In, Installment #9)”

  1. The only objection to this video that I have is the definition of sub-prime. It does not refer to people but to the initial rate on the mortgage - a hook. The rate is below prime to make it easy to start then it moves to a higher rate that the buyer cannot afford - hence the defaults. At least that was my understanding of the definition.

  2. According to today's globe and mail, their definition of sub-prime as referring to the borrower is correct! I think I confused it with the low introductory interest rates on credit cards that proliferated in the last 20 years. Whatever it is, our chickens have come home to roost.

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