十分钟看懂次贷危机(PPT)

This is great for them because housing prices has been rising practically forever.
BUT ONE DAY
One day,the lander gets s call from an investment banker who wants to buy the mortgages.The lender sells it to him for a very nice fee
CONNECT INVESTORS TO THE HOME OWNERS
A family want a house,so they save for a down payment.
And contact a mortgage broker.
The mortgage broker connects the family to a lender who gives them mortgages..The broker makes a nice commission.The family buys a house and becomes home owners.
LEVERAGE
The investment banker then borrows millions of dollars an buys thousands more mortgages and put them into a nice little box.This means that every month he he gets payments from the home owners of all the mortgages in the box.
Who is affected? EVERYONE!!!!
HOME OWNERS
HOW DID IT HAPPEN?
INVESTORS
Mortgages Houses
These groups are brought together through the financial system——a brunch of banks and brokers commonly known as wall street.
This is CDO.
THE CDO
Then he cut the box into three slices safe,okay and risky.A CDO works like three cascading trays ,as money comes in,the top tray fills frist then spills into the middle and whatever is left into the bottom.The money comes from home owners paying off their mortgages,if some owners don’t pay and default on their mortgage,less money comes in and the bottom tray may not get filled.This makes the bottom tray riskier and the top tray safer.
USING LEVERAGE
Then he goes and buy 100 boxes with his one million dollars and sells them to someone else for 1100000 dollars.Then he pays back his 990000plus 10000 in interest and after his initial 10000,he is left with 90000 dollar profit verse the other guys 1000
LEVERAGE
This make borrowing money easy for banks and cause them to go crazy with LEVERAGE.
Here is how it works!!!
A NORMAL DEAL
someone with 10 thousand dollars buy a box for 10000 dollars
He then sells it to someone else for 11000 dollars
For 1000 dollars profits,a good deal.
USING LEVERAGE
But using leverage,someone with 10000 dollars would go borrow 990000 more dollars,giving hin one million dollars in hand.
PPT模板下载：/moban/
The Crisis of Credit
by CAO RUI 1300033
WHAT IS THE CREDIT CRISIS?
It is a worldwide financial fiasco involving terms you may probably heard like sub-prime mortgages,collateralized debt obligation,forzen credit markets,credit default swaps.
money
Lar
One percent is a very low return on investment,so the investors say“no thanks”.
ON THE FLIP SIDE
On the flip side,this means banks on wall street can borrow from Fed for only 1%,add to that general surpluses from Jpan,China,and Middle East,and there is an abundance of cheap credit.