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The Subprime Crisis-almost a Modern Fairytale
- 1. Wonderland Productions in association with SubPrime presents You The Subprime Crisis almost a Modern Fairytale Directed by Thomas Wicki
- 2. STARRING: Private Real Estate Purchaser Broker Subprime Lenders Wholesellers Investment Banks Rating Agencies Investors
- 3. CO-STARRING: A lot of Money Subprime Mortgages CDOโs MBS Investment Products Increasing Housing Prices Decreasing Housing Prices
- 4. ย
- 5. Once upon a time there was a Wonderland whereโฆ.
- 6. โฆ ..Housing Prices were increasingโฆ.. โฆ .and more and more money was available
- 7. Some smart people in Wonderland invented a Money Making System which worked in the following way:
- 8. The Subprime Lender raise a lot of money whichโฆ. โฆ via their Broker goes to hardworking people who suddenly can buy a house Subprime Lenders Broker Private Real Estate Purchaser
- 9. These hardworking people are very happy because they never thought they can buy a houseโฆ.. โฆ but thanks to the Money Making System of the Wonderland they now have their own house! Private Real Estate Purchaser
- 10. The Subprime Lenders are very smart guys, they donโt want to have the risks of the mortgages they are givingโฆ. โฆ .thatโs why they are selling the mortgages to a Wholeseller Subprime Lenders Subprime Mortgages Wholesellers
- 11. But the Wholesellers are also smart guys and are selling the mortgages to the Investment Banksโฆโฆ โฆ .who are buying all kinds of mortgages they can get! Subprime Mortgages Wholesellers Investment Banks
- 12. The Investment Banks have the smartest guys and they have the great idea to create new productsโฆ. โฆ .which are called Collateral Debt Obligations (CDOโs) or Mortgage Backed Securities (MBS) Investment Banks CDOโs MBS Investment Products
- 13. CDOโs or MBS are basically a basket of different mortgages of different credit ratings Investment Banks CDOโs MBS Investment Products
- 14. Thanks to the Rating Agencies the new products get really good ratingsโฆ.. AAA Investment Banks CDOโs MBS Investment Products Rating Agencies
- 15. โฆ And because of the good ratings banks can now sell these products to all kinds of investors. Buying High Return Investment Banks CDOโs MBS Investment Products Investors
- 16. And so a system was created in which everyone was very happyโฆโฆ
- 17. AAA The Money Making System: Private Real Estate Purchaser Broker Subprime Lenders Wholesellers Investment Banks Rating Agencies Investors Mortgages CDOโs MBS Money/ Commission Money Mortgages Money/ Commission Mortgages Money/ Commission Mortgages Commission Money/ Commission
- 18. โฆ Because as long as the system is working everyone earns good money!
- 19. Unfortunately the conditions start to changeโฆ..
- 20. The Housing Prices are falling dramatically
- 21. A real storm hits Wonderlandโฆ.. โฆ .destroying the so wonderfully working Money Making System. The citizens of Wonderland are now losing a lot of money and getting very unhappy!
- 22. The storm hits Wonderland much harder than anyone would expectโฆ.. โฆ .and shakes Wonderland to its very foundations.
- 23. However, like after every storm, the sun will once again shine over Wonderlandโฆ. but the citizens of Wonderland have to realize that the promising dream of the Money Making System is a dream too good to be trueโฆ
- 24. .... and only hard work will make them live Happily Ever After.
- 25. If this story would have been told two years ago it certainly would have been hold as a fairytale. No one could imagine that such a crisis was possible. Unfortunately this fairytale turned into reality and we experience one of the most severe financial crisis since 1929. The crisis will go over and the economy, housing prices and stock markets will start to rise again. However, the end of one crisis is the beginning of the next one. Unless a lesson will be learntโฆ..
- 26. THE END