“They were having massive private gains at public loss!!!”- why?

Brief effects

• destruction of equity wealth, of housing wealth; the destruction of income, of jobs;

• 50 million people globally could end up below the poverty line again

• 30 million people lost their jobs — this is just a, a hugely, hugely expensive crisis.

• The number of Americans on food stamps has increased 74% since 2007.

• By the time George W. Bush took office in 2001, the U.S. financial sector was vastly more profitable, concentrated, and powerful than ever before.

The reasons of financial crisis(subprime crisis) in 2008

Lowest interest rates since 2001

( then after 2005 they increase the interest rates and that contribute to bankruptcy . )

Lack of regulationsled the financial market was extremely unstable.Everyone easily could get money at lowest rates.Then they speculate the real estate and theyImpawn the estate to the bank to get new loan and the price of houses of US was skyrocketed.

What is Subprime lending?

means making loans to people who may have difficulty maintaining the repayment schedule. These loans are lend by higher interest rates and less favorable terms in order to higher credit risk.

The real rulers

This is the thinking of the crazy people who borrow the money to buy houses

• “ Real estate is real. They can see their asset; they can live in their asset; they can rent out their asset.”

In the old system, when a homeowner paid their mortgage every month, the money went to their local lender. And since mortgages took decades to repay, lenders were careful.

Thirty years ago, if you went to get a loan for a home, the person lending you the money expected you to pay back.but…

We've since developed securitization, whereby the people who make the loan are no longer at risk if there is a failure to repay.

• The investment banks create a very complicated, destructive, innovative and complex —financial derivative called collateralized debt obligations, CDOs.

• And investment banks pay the rating agencies to value the CDOs so that the CDOs can be sold more “successful”

• Goldman Sachs; Bear Stearns; Lehman Brothers; Merrill Lynch, were all in on this.,

subprime lending alone increased from 30 billion a year in funding to over 600 billion

a year, in 10 years.

The risk

• This system was a ticking time bomb. Lenders didn't care anymore about whether a borrower could repay, so they started making riskier loans. The investment

• banks didn't care, either; the more CDOs they sold, the higher their profits. And the

• rating agencies, which were paid by the investment banks, had no liability if their ratings

of CDOs proved wrong

Lehman Bro’s collapse leads to Domino effect

The bad debts are increasing

Housing price doubled than last boom

The food chain was going to Collapse

The deeply Effects

• the number of small businesses in America is rapidly declining. The giant banks and the giant corporations that run everything are constantly running around stomping all of the “small banks" out of existence. This has created an environment where the rich are constantly getting richer and the poor are constantly getting poorer.

The evidence of the poor are getting poorer

• The wealthiest 1 percent of all Americans now own more than a third of all the wealth in the United States.

• In 1970, 65 percent of all Americans lived in "middle class neighborhoods". By 2007, only 44 percent of all Americans lived in "middle class neighborhoods".

Political Slogan :”change”