/biz/ - Business & Finance

>>15987876
Take the 2017 crypto bull run and flip it around so that banks were actually trying to lend people money to buy shitcoins so they could buy and then sell to someone else later, but with housing instead of crypto.

2018 comes, Bitcoin crashes, shitcoins crash. People can't pay back the hundreds or even millions of dollars of loans they took out to buy crypto.

Banks that lent out billions of dollars to people so they could buy crypto will never get that money back and they start to fail.

Congress says the banks are too big to fail.

The fed starts printing money to give to the banks so they don't go out of business, and while many people go bankrupt and have their shitcoins repossessed, the banks now holding the shitcoins don't want to see the price of their shitcoins go down, so they don't immediately dump but instead try to gradually sell it off, leaving the market to still be a little bit up instead of properly deflating to nothing.

The money printed to bail out the banks raises asset prices, pushing wealth accumulation even farther out of the average person's reach and setting us up for an even bigger crash later when the fed tries to stop pumping banks' bags.

>>15987876
>Was it Wall Street fat cats doing the most Jewish things possible, or brainlet-tier investors who couldn’t see the writing on the wall?
Tl;Dr

Imagine crypto 2017 bullrun but it's not just some of the internet crowd, but all the normies taking out loans to buy Bitcoin for hundreds of thousands of dollars each and banks are actually approving it either because they are brainlets or because someone else will buy those debts.

Imagine how much bigger the 2017 peak and worse the 2018 crash would have been if all your neighbors were putting their life savings into shitcoins and even the banks thought shitcoins were safe investments and were willing to give you and all your neighbors mortage-sized loans to buy shitcoins.

People wanted risk free, high yield returns. Government bonds used to provide decent returns, but by the 2000s the return is only just 1%. So what’s the solution?

Mortgage back securities. You see, housing prices ALWAYS go up in value. And the New York housing market is unncorrelated to the Florida housing market which is uncorrelated to the California housing market. So if you bundle a bunch of mortgages from different regions, you have a risk free, high yield security.

But then the government started encouraging poor people to buy homes. And it turns out that housing prices can actually go down in value if a bunch of people default on them. And if you build your entire financial system on the assumption that mortgage back securities are risk free when in fact they are indeed risky, then the global financial system is going to collapse.

it was the combination of a very good financial structure called CDOs and people at all steps in the process being incentivized to keep making more of them even when it required giving mansion loans to crackheads with no job history, money, or credit.

It's all built on lies and that was the first shockwave. What is coming will be far worse.

>>15988393
The entire industry failed to understand the risks of credit default swaps.

>>15987876
>Doesn't realize it's happening again right fucking now

>>15987876
Gov and banks pushed blacks and Latinos to get housing loans bc muh diversity and they couldn’t pay it back

>>15987876
couple good answers already in this thread, basically there were two really popular financial products, one called a CDO (collateralized debt obligation) and another called a CDS (credit default swap)

a CDO is when you take a bunch of different loans (or at least that was how it was supposed to be) that you own as a bank, package them together, then sell rights to the interest payments on those loans to "investors", buyers of the CDOs, these investors basically pay the principal on the loan and get to collect interest payments among various risk tiers, naturally higher risk of default means higher interest rate, originally CDOs were composed of a diverse basket of loans: mortgage, car, personal, credit cards, etc. but they increasingly became solely built off of mortgages that were lent to people with absolute gutter tier credit, but the credit ratings agencies completely lied about said people's credit and said they were AAA folks, you can see how this looks bad already

naturally these investors want to hedge the risk of default somehow so they purchased another type of financial product called a credit default swap: a CDS allows the buyer to pay quarterly (or whatever the contract dictates) premiums in exchange for default protection from the seller of the CDS, banks and investors were buying fuckloads of CDSs from other banks and investors to hedge the default risk on the CDOs

finally when the gutter dumpster tier credit people (who were lent mortgages that they absolutely 100% were going to default on according to anyone in the know at the credit ratings agencies) did actually end up defaulting, the CDO buyers looked to the CDS sellers for default protection, which they were unable to provide because of the sheer magnitude of the volume of defaults which was enabled by the opaque and kikish ratings agencies, causing mass defaulting among CDS sellers causing them to be insolvent, time to go suck the money out of the Fed's tits for basically free

>>15988458
shut the fuck up you scary fuck

In one word:
niggers

literally niggers.

In three words:
niggers and jews

>>15988618
>a CDO is when you take a bunch of different loans (or at least that was how it was supposed to be) that you own as a bank, package them together, then sell rights to the interest payments on those loans to "investors",
> another type of financial product called a credit default swap: a CDS allows the buyer to pay quarterly (or whatever the contract dictates) premiums in exchange for default protection from the seller of the CDS, banks and investors were buying fuckloads of CDSs from other banks and investors to hedge the default risk on the CDOs

imagine being the kike who thought that shit up

>>15988618
High iq. Absolute shit show. What I’m seeing as our biggest problem now is undercover qe for months in the fact that banks are loaning companies money to buy their own stocks to inflate prices. They’re tether pumping the markets. Imagine if tether could print billions a day. It works till it doesnt. Reminder buying stocks on loan is what caused the great depression

>>15988673

>>15987941
I actually agree.

the bail out didnt solve the problem...only made the dollar worth even less and kicked the can down the road to a later date.

cant wait for it to all burn. the true collapse will come when government currency is worth dogshit and people start looking for gold back currency again.

>>15987941
Good example but with housing the fed buys a lot of the shit coins from banks

>Ctrl F
>Central bank
>Federal reserve
>No results

Low interest rates inflating asset bubbles and indebting stupid people

>>15988680
>buying stocks on loan is what caused the great depression

>>15988744
I said "jew"
So basically the same thing.

>>15988618
Appreciate you taking the time to type that out. Biz is usually full of utter shit but a few people are grateful for proper information.