Stockton California, Bergen Norway, United States discussed on Morano in the Morning

Automatic TRANSCRIPT

And after all of those years on wall street of bubbling up and questioning sort of the morality and they're just idea that you can sort of do this two countries people and so forth i just really after nine eleven decided it was enough to short and i quit a few months after that now then of course after september eleventh next great crisis that the country faced an addition to the wars that came out as a result in at least in part of that was the the great recession now i think a lot of folks listening to us think that what happened was that a bunch of people couldn't pay their mortgages and that's what brought about because people took loans they couldn't afford and that's what led to the global financial collapse you've written that the story is actually a little more involved in that what caused the great recession or what caused it was not that people couldn't pay their mortgages some couldn't and some were lied to and then couldn't but what really caused it was that the big banks were able to buy up all of the mortgages of the individual people that couldn't couldn't pay and stick them together into what we now call nicely toxic assets and sell them to the world sell them to pension fund sell to small towns in stockton california in bergen norway throughout the world and spread the risk and multiplied it many many many times and added derivatives or more complex sort of structures to them to make them look more appealing to those that they were selling to lied about the integrity of these assets and ultimately was that lie that fell apart and that caused the financial crisis i'll give you just two numbers it's early in the morning but there was a half a trillion dollars worth of subprime or the lowest quality of mortgages in the united states going into the financial crisis and these large bank were able to create from that wait for this one hundred and forty trillion dollars worth of borrowing and assets and proliferated throughout the world that failure in those assets and the borrowing behind them caused the collapse a to my former employers leeman and and bear stearns but also the collapse of the financial system and as we know in the wake of that those biggest banks that create in proliferated these toxic assets were saved and.

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