http://www.youtube.com/watch?v=qqUGoVez8xg
This clip was sheer brilliance.
It’s a visualisation of the credit crisis that followed the Subprime Mortgage Crisis. Admittedly, there are some things that I think are missing, but what it illustrates is the following:
- Homeowners are linked to mortgage providers through their mortgages.
- Mortgage providers are linked to banks.
- Banks are linked to institutional investors.
- Institutional investors are investing the pensions and savings of homeowners.
It’s a really broad generalisation – but [spoiler alert] the crazy twist at the end is that homeowners were borrowing from themselves.
Check it out.
And if you want to read more about it, here are the relevant posts:
