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Thanks Heisenberg for explaining it to me like I'm Jesee.

Funny the big boys got away with it and kept their jobs adn companies whilst the home owner lost everything.

Very cool channel! Great to have discovered it with this video on such a random topic 🌞

Hi, I just came across this video. Is CDS similar to PMI on a large scale?

How do you feel about rich people who won the lottery at birth by being born in an extremely wealthy family?

No one does videos like yours anymore on youtube. They are short, instructive and straight to the point. A godsend for anyone who just wants to understand the basics.

thats why Islam prohibited riba (interest)

Excellent explanation

its a perfect explanation, thank you! However, you should have spanked the milf doll. :DDD

Fantastic video congratulations!!

Who is Jesus? and how can he save you?? Well lets say there's a Devil and he's an accuser....and lets say that your sins are a huge debt. Haha well.....Jesus payed that debt...in fact he paid it all!!! and now satan can't accuse you because your forgiven. Thats how salvation works! and on that cheerful note...

"little principle" 1 chip. "little interest" 3 gold chips. yet you claim this isn't exact? 😉 also, thank you for the on-point explanation of what the hell a CDS is.

Fed: oh no! The economy is falling down a black hole because the big investment firms over leveraged credit default swaps on homes they fraudulently labelled as perfectly safe investments! What should we do? 🧑: well since the source of this crisis was a bunch of homeowners failing to pay their mortgages due to manipulative bank policies, maybe we should bail out the homeowners so they can continue paying the mortgages and keep their houses. That way the fundamentals remain intact. We can make Wall Street pay it back later with some regulations and higher taxes. Fed:… Fed: 😂😂😂 ok, ok, does anyone have a REAL idea?

So the home owner is irresponsible but not the insurance company?

Simplest and easy-to-digest video related to what are the Credit Default Swaps. Thank you Mr. Millard.

Crooks and corrupt then still are.

the Great Depression started in '29, we're right on schedule

That was awesome

what a beautiful and insightful explanations. I really liked it. hope see more of this simple nature for complex financial term.

Me: "Yeah dude a CDS is actually a pretty simple once u hear it explained.. Its like let's say you have insurance. Or wait you're the bank ok and I have a mortgage... Ya know what man you probably wouldn't get it."

Finally, someone has explained the whole s**t-show in a way that I can understand. Thank you, sir!

"Still has not been fixed." As mortgage rates rise, history will repeat itself.

wow people who buy homes are dumb for taking on that risk, i'll just rent :)

Now that's how you describe Credit Default Swaps! I need you to teach all of my series 7 content lol

One problem with this video is that it implies irresponsible borrowers were the cause of the 2008 World Financial Crisis. Certainly, they played a role, but so did irresponsible mortgage brokers and Wall Street investment banks. The problem with Wall Street's high risk institutional culture hasn't been fixed yet, either.

the most perfect simple explanation ive ever seen

Absolutely the best explanation ever about CDSs. You made it so simple! I am sure there are a lot of technical details about these instruments, but this is all we needed to know. Thank you.

Hey there Dr. Burry. How about we sell you this CDS. If the housing market collapses, that is, if all of these homeowners default on their mortgages, we'll guarantee an insurance payout, to you. But you are going to have to pay us a monthly premium for such an opportunity. The banks thought that the housing market was rock solid. It wasn't. Dr. Burry knew he was going to buy millions of swaps, and it is no wonder that he wanted to be assured that, when the housing market collapse happened, that the banks were going to have enough liquidity to pay him, as agreed. The banks were on the hook for billions. But they didn't care. They were going to get fat premiums, every month. They thought it was a fool's errand to bet against the housing market. If the banks declared bankruptcy, those swaps that Dr. Burry bought, and others doing what he was doing, would become worthless. What a bet!

Yes, a little simplied. Watching the Big Short helps but even that needs to be explained.

Great explanation Thank you❤

I'm a little confused. I thought it was all the people defaulting on their mortgages that crashed the economy and not a crashed economy that lead to all the people defaulting.

yes the banks and insurance companies are partially to blame but so are the individual buyers. 2008 was everyone's fault.

AIG is the insurance company in this example.

Unmmmm…those homeowners WERE irresponsible and took out loans they could not afford! The banks are not the only ones responsible for mortgages not being paid.

Would be wonderful if the government pays our Margin Calls all the time....

what a great teacher!

thank you so much.

This was so wholesome.

This still going on and hope big greedy institutions go down

feels like a park ranger giving me financial advice haha 🤣great video though, easy and simple explanation

Very good explanation and very accurate with one additional bit of information: The insurance companies who sold the credit default swaps also had insurance on those credit default swaps and that’s why it spread like wildfire.

I know this video is years old…but the gentleman neglects to tell one very big part of the story. The credit default swaps, once they came into existence, gave the banks ZERO RISK, so, they employed and sent out 10’s of thousands of sales people to go door to door, and offer NINJA loans to renters, particularly low income/bad credit African Americans, so they could by a home. NINJA = No income/No job loans, at a teaser rate of 2% or so… Then the teaser rate adjusted after 1-3 years to %10+++ percent because of their true credit score. And often the monthly mortgage amount quadrupled! And 80% of those loans foreclosed. Zero risk for the Bank. It was the biggest fraud - scheme in American history… Of course until now…lol

I lost my job of 22 years .

You're the best!

Here from the big short to understand wtf is a credit default swap 🤣

Wasn't this the govt's "Everybody has to have a trophy" program. No more privileges, just rights. You have a right to own that home you can't afford, you have a right to that job you're not qualified for. I remember the 3-2-1 buydown loans. First year, only a low interest rate. The second year, a higher interest rate and property taxes kicked in, then the third year, the final and highest interest rate kicked in. Realtors told everyone to just go with it, even though you can't afford it. In three years, just sell the home and make a profit from it. What happens when a ton of homes all go up for sale at the same time? And nobody buys them, and the people that own them can't afford them?

Government was the culprit who had created all that messes!

Thank you sir 🫡

The best explanation I’ve seen