저자: 미상 · 외국인
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2008년 금융위기를 다룬 해설 영상. 주택담보대출(모기지) 증권화 과정에서 신용평가사가 고위험 대출(Triple C)을 AAA로 과대평가해 MBS에 섞였고, 변동금리·IO·네거티브 아마 대출이 부실을 키웠다. 마이클 버리는 2004~2005년 주택시장 버블을 예측해 CDS로 베팅해 약 1억 달러(투자자 전체 약 7억 달러) 이익을 냈다. 교훈은 시장 발언을 맹신하지 말고 직접 실사하라는 것.
다듬은 글
the 2008 financial market crash was so big that it put the whole world into recession and a half% generally across these markets let's talk about the speed with which we are watching this Market deteriorate on about 18% the stock market is now down 21% cuz we're now down 43% what in the world is happening on Wall Street it was the worst day on Wall Street since the crash of 1987 we' had an 8-day losing streak in the Dow that in percentage terms puts it on par close to the loss suffered in that crash in 1987 close to that percentage loss those two days in 1929 what started in America last year has now spread to every part of the world we're down 9% today the ZRX over in Frankfurt is down by 9% the Paris Market down by 9% Austria which was briefly suspended earlier on in the day is down by nearly 11% this could be the most serious recession in decades and that means life as most Americans know it is about to change in some cases dramatically everyone was losing jobs and was not even able to feed their families but there was one person who profited the most from this crash his name is Michael bur a hedge fund manager who managed some funds how did Michael bu figure out about the potential crash why exactly did the financial crisis happen we will find out in this video the two important factors in this financial crash were the American dream and the greediness of the big Banks the American dream we all know is the idea that everyone is hardworking has a good job and owns a home every immigrant who comes to America has this American dream and they strive to buy a home by working hard now let's start from the beginning the most important aspect of the 2008 home crash is that everyone wants to own a home to buy the home Banks provide loans when a borrower goes to the bank to get a loan Banks cross verify whether that person is capable of paying back the loan if the person is not capable of paying them Banks usually reject the loan if the person is capable of paying back the loan then the bank gives him the loan and earns interest this is how commercial Banks make money by giving out loans but what happens after the loan is given by the bank let's say 10 people have taken a loan from ABC Bank to buy a house and they owe money to ABC bank now what ABC Bank does is sell these loans to an investment bank now people owe the money to the Investment Bank the Investment Bank combines these loans and creates new products known as mortgage-backed Securities this process is known as securitization and allows investment Banks to transform a portfolio of individual loans into a tradable security this product is then sold to investors invest investors trust these mortgage-backed Securities because they're considered one of the safest Investments as everyone pays their home loans to own a house these Home Loans are the fundamental part of these mortgage-backed Securities in mortgage-backed Securities these loans are rated by rating agencies like Moody the rating is done according to the behavior of the borrower it is called a trunch for example if a borrower pays the premium on time and never misses any premium the probability of such a borrower paying back the loan is higher so such loans are typically rated higher these loans are rated as AAA loans another type of borrower might miss some of the premium here and there but at the end he will pay back his loan he may pay it a little late but in the end he pays it back and this type of borrower is slightly riskier than the previous type of borrower so such loans are rated a little lower these loans are rated Triple B and the third type of borrower might default on his payments and not be able to pay back his loan such loans are rated lower and they are rated as Triple C loans now when an investor invests in such mortgage-backed Securities they first check the overall ratings given by the credit rating agencies to these mortgage-backed Securities if a mortgage-backed security had a higher number of AAA loans it was considered a safer investment by investors but there was another problem because investment Banks and credit rating agencies were hand inand the credit rating agencies never gave the true rating to these loans for example if the loan actually had a rating of Triple C but the credit rating agencies ignored that and gave it a rating of AAA so all these mortgage-backed Securities were rated higher because of these fraud ratings by credit rating agencies because of this investors thought these mortgage-backed Securities had the majority of AAA rated loans but instead they were were all filled with the majority of Triple C rated riskier loans which made these mortgage back Securities much riskier than investors thought this whole process was very beneficial for The Banks Banks would just give out loans and then they would sell these loans to the Investment Bank the Investment Bank would then just create mortgage back Securities with these loans and credit rating agencies would rate them higher then it was sold to investors as a safe investment but all of this was going on the assumption that everyone paid their loans which in the majority of cases is true but the number of loans a bank can give is limited to people who have a good income so Banks started to give armm loans which means adjustable rate mortgages an adjustable rate mortgage is a type of home loan that has an interest rate that can change periodically over the life of the loan before the 2008 financial crisis lenders and Banks were offering armm with very low initial rates to entice borrowers but those interest rates would increase after the initial period often causing payments to become unaffordable for borrowers this attracted many borrowers who were not responsible with their finances ultimately leading to many bad loans this led to more Triple C type of loans in the MBS product to entice more borrowers Banks started giving interest only adjustable mortgage IO armm loans it is a type of mortgage loan that allows borrowers to pay only the portion of the mortgage payment for a certain period of time typically the first few years of the loan after the interest only period ends the borrower must begin making payments that include both principal and interest this type of loan became popular in the Years leading up to the 2008 financial crisis as it allowed borrowers to make smaller monthly payments during the interest only period which could make home ownership more affordable this attracted even more risky borrowers to take out loans however these loans were also associated with higher risk as borrowers were not paying down any principal during the interest only period but when the interest only payment period was over they were often unable to pay the higher payments that included both principal and interest if interest only adjustable rate mortgages were not enough the banks wanted to entice even more people to take loans so later the situation got even crazier and Banks started giving an interest only negatively advertising adjustable rat subprime mortgage IO NM this was the worst type of loan in which the borrower could pay almost nothing or a very small amount of the premium every month and their remaining premium amount would get added to the principal amount of the loan this type of loan attracted even more risky investors who just borrowed money and then eventually defaulted the credit rating agencies gave AAA ratings to such loans which were added to the mortgage-backed security product because of this mortgage-backed Securities were mostly filled with riskier and worthless Triple C rated loans which was nothing but a ticking Time Bomb all of this craziness was going on the assumption that demand for houses would keep increasing and the price of houses would continuously go up also the interest rates were lower when giving out these loans when interest rates started to go up or were readjusted for the loan amount many of these borrowers were not able to pay any of these loans and they started defaulting on their loans so Banks took their homes to resell them this started to happen with all the loans that were given and eventually everyone was defaulting on their loan so this created a huge supply of homes in the market where there are not enough buyers this resulted in home prices starting to go down and resulted in a wave of foreclosures when home prices declined but the banks were not even able to get 50% of the original value of the house once the bar borrowers started defaulting the cascading effects started and the investors who bought the mortgage back Securities of these loans also started losing money so it was a chain reaction that started from the bottom and ended at the top in the 1980s the US government passed the secondary mortgage enhancement act which allowed Pension funds and insurance companies to invest in these private MBS the Pension funds and insurance companies were heavily invested in the MPS considering they were safe Investments because the credit rating agencies gave them good ratings but these Pension funds and insurance companies lost huge amounts of money during the crash wiping out the pensions of the hardworking common people now all of this chaos was happening while everybody was unaware of what was going on there was one guy Michael bur who was carefully observing what exactly was happening as the loans written by the Banks had to be reported to the SEC all this data was in the public domain and nobody cared to read it except Michael bur when he read all the details of the MBS bonds he understood that a large portion of all these bonds are filled with interest only adjustable rate mortgages which he found very shady he further studied the housing market and figured out that the growth in the housing market is a bubble at some point this bubble in the housing market is going to burst and crash the market this was around the year 2004 to 2005 he actually correctly predicted that the crash would begin in 2007 when when the interest rates of these adjustable rate mortgages were reset or changed Michael bu at the time was managing a hedge fund as the manager of a hedge fund it was his job to find Investments where his investors would make the most profit I look for Value wherever it can be found if you want to learn about hedge funds and how they work check out this video on the channel at the time there was no method or instrument with which you could bet against the housing market Michael bur went to those investment Banks and asked them to create a new instrument called credit default swaps with credit default swaps he bet the money on those mortgage-backed Securities that they would fail he also paid the monthly premium for those swaps basically he shorted the housing market it was very unusual at the time because everyone assumed that everybody paid their loans everyone thought he was crazy and wrong but Michael bur was sure the housing market would crash even the big investment banks with big research teams were not able to figure out this ticking Time Bomb watch it will pay I I may have been early but I'm not wrong once people started defaulting on their loans the domino effect started resulting in a global recession when the housing market crashed Michael bur received all the premium amounts he paid for those credit default swaps in the value of the contract they fixed Michael bur's bet made him $100 million personally and a total of $700 million for his investors this is how the greediness of the big Banks caused one of of the biggest Financial crashes in history the story of Michael bur also tells us that if you want to make real money then you should not blindly believe anything that is said in the market you need to do your own due diligence before making any kind of investment to make real money through the markets we hope you understood everything about the big shorts and the 2008 financial crisis and if you did then give it a like And subscribe to the channel to learn more about money
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