Some years ago I read a book called "23 Things They Don't Tell You About Capitalism" by Ha-Joon Chang (an economics professor in Cambridge UK) were he argues against the "too complex financial products" because few people really understand them (an their risks), so we end up with markets with a "herd behaviour" causing financial/economical crisis more often and more severe that probably wouldn't happen if "normal people" (polititians, voters, even "average-economists") could understand better what financial institutions are doing with everyone's money… I am a Portuguese engineer and my country (and the whole of Europe) still hasn't fully recovered from the consequences of the 2008 crisis… (although most of the blame is due to our politicians)
Some are supportively mentioning how Patrick upgraded his videos. I like his recent videos but also love the older ones. They’re direct, informative, and educational. Don’t compromise the quality. It’s why I subscribed.
The day when BNP Paribas couldn’t value a CDO because the value was going down, values had only gone up previously. That is the moment I would like to see discussed.
There is a lot of talk about models – there is no models in the video at all! Thanks for upgrading from this VGA camera bro 🙂 Thanks for some high quality content Patrick.
When looking at the timeline of the appearance of credit derivatives it appears as if these were created solely in order to satisfy investor demand for 'objects of financial speculation' (instead of e.g. a popular, political movement to widen access to capital or home ownership) – which begs the question if derivatives have a function beyond speculation, but towards e.g. raising capital for expensive investments (the equivalent to steelyards, shipyards, workshops and entire railroads in the 19th century which required ever larger banks and asset accumulation).
If investors seek nothing but higher yields through greater risks with their capital, potentially involving enforcement of 'free trade' across national borders ('open door policy') via military intervention (e.g. the Opium Wars) than investment banking is per definition a destabilizing factor in modern economies – and the question would be what justification private ownership of capital could have from a political perspective (foremost the supply of capital for investment into the production of goods and the offering of services – that is consumer demand ).
Is there a structural similarity between the relaxation of lending criteria prior to 2008 in the US and the 'Japanese asset price bubble' from the 1986 to 1991 ?
criminally under viewed.. lets keep it as our secret.. ah no.. anyone who asks me for help in the financial market i will always send them here.. this info Patrick gives is absolute GOLD.. most people i know think they know it all .. and good luck to them ,.. the only thing i am certain of in life is that I know nothing….Thanks Patrick!!
I don't see an answer to the main question though: what was so special about the loans that they became NPLs en masse? That some derivative products on top of the loans were impacted, is only a secondary effect.
Are the public at large served by the constant creation of new financial products which certainly make their sellers profit? Where have they moved too far from the real economy and serve the financiers and not the real economy?
Generally I would say that these innovations give investors a false sense of security along the lines "this time will be different".
Some years ago I read a book called "23 Things They Don't Tell You About Capitalism" by Ha-Joon Chang (an economics professor in Cambridge UK) were he argues against the "too complex financial products" because few people really understand them (an their risks), so we end up with markets with a "herd behaviour" causing financial/economical crisis more often and more severe that probably wouldn't happen if "normal people" (polititians, voters, even "average-economists") could understand better what financial institutions are doing with everyone's money…
I am a Portuguese engineer and my country (and the whole of Europe) still hasn't fully recovered from the consequences of the 2008 crisis… (although most of the blame is due to our politicians)
Production quality has come a long way in last 2 years 😀 This looks distinctively like a ransom video
If borrowers kept up with their payments would crisis have been averted?
I really enjoy listening to your knowledge Patrick. Thanks so much for sharing with us.
Finance should be boring.
When it gets exciting, history proves we have problems.
I want an unsecured loan !
Back then I foresaw the insustainability of the interest only mortgage payments. It was completely stupid. But I didn't know how to profit from it.
Some are supportively mentioning how Patrick upgraded his videos. I like his recent videos but also love the older ones. They’re direct, informative, and educational. Don’t compromise the quality. It’s why I subscribed.
I really like your videos, Patrick. Thanks man. Appreciate that facts, and the style you deliver them 🙂
Sounds like US student loans. The school's interests are not aligned with the student's ability to pay it back.
Greed & Currency…..
keep the education coming Patrick. Thank you.
13:05 cough Peter schiff cough
Yet again, not a single minute wasted. Such purely good information….just excellent
The day when BNP Paribas couldn’t value a CDO because the value was going down, values had only gone up previously.
That is the moment I would like to see discussed.
There is a lot of talk about models – there is no models in the video at all! Thanks for upgrading from this VGA camera bro 🙂 Thanks for some high quality content Patrick.
Your channel is mandatory to watch !
going through the older videos and they are very informative, educational and to the point. Very undervalued Please keep the quality
Smooth Patrick.
Excellent content, thanks!
Honestly, this looks like a hostage video. I'm glad you've taken pandemic time to upgrade audio and set decorations.
Should make a video on why derivatives are even actually necessary… what value do they bring to investors and to society.
Years later, back to the same shit lol
The deceptive and divisive race rhetoric of Leftists is what actually caused it. Banks were forced to make loans to people with terrible credit.
One of most underrated financial channel on youtube. Very nice and clear explanation of a somewhat complex topic. Thank you!
When looking at the timeline of the appearance of credit derivatives it appears as if these were created solely in order to satisfy investor demand for 'objects of financial speculation' (instead of e.g. a popular, political movement to widen access to capital or home ownership) – which begs the question if derivatives have a function beyond speculation, but towards e.g. raising capital for expensive investments (the equivalent to steelyards, shipyards, workshops and entire railroads in the 19th century which required ever larger banks and asset accumulation).
If investors seek nothing but higher yields through greater risks with their capital, potentially involving enforcement of 'free trade' across national borders ('open door policy') via military intervention (e.g. the Opium Wars) than investment banking is per definition a destabilizing factor in modern economies – and the question would be what justification private ownership of capital could have from a political perspective (foremost the supply of capital for investment into the production of goods and the offering of services – that is consumer demand ).
Is there a structural similarity between the relaxation of lending criteria prior to 2008 in the US and the 'Japanese asset price bubble' from the 1986 to 1991 ?
criminally under viewed.. lets keep it as our secret.. ah no.. anyone who asks me for help in the financial market i will always send them here.. this info Patrick gives is absolute GOLD.. most people i know think they know it all .. and good luck to them ,.. the only thing i am certain of in life is that I know nothing….Thanks Patrick!!
Welcome to 2020-21
Wtf not even 2k views
I was the 100th like on this video. 🙂
I predicted that no bankers would go to jail!
People like Michael Burry and John Paulson and Paulson's friend Green used CDS to good effect .
It seems nobody knew or cared to know how much of the borrowers will default. The whole shebang could've worked out otherwise.
I don't see an answer to the main question though: what was so special about the loans that they became NPLs en masse? That some derivative products on top of the loans were impacted, is only a secondary effect.
Are the public at large served by the constant creation of new financial products which certainly make their sellers profit?
Where have they moved too far from the real economy and serve the financiers and not the real economy?
Your channel is criminally under-viewed Patrick. I look at your channel almost daily hoping for a new video. Keep up the incredible work!
Great content. Can you please do a video about how you can follow these products in chart or data form..