Building
solved the financial crisis, and that a system created to create money that does not make it possible. Building is the process of the creative financing of real estate transactions allowed. Some bankers in some of the world's largest banks had a basic idea - the idea that money can be created on paper -. and took it too far In the Disney classic "Fantasia", one of the most memorable episodes, the "Apprentice" when the cocks young magician in the magic that can not control. A broom handle is an army of brooms and the young wizard magic can not stop. This cartoon is a powerful example of what happens to the banks. They used the money-making magic, then greedy. Like the sorcerer's apprentice, he unleashed the magic could control the banks in the process of making money out of control has caused an apprentice. With the new freedom of all sorts of rules during the Great Depression later threw some of the largest banks creates caution to the wind and an incredible variety of paper instruments allowing them to make big profits. The largest investment and commercial banks created their own design creative financing techniques, such as "credit default swaps and other exotic derivatives, to create paper money. Then these are paper assets are "securitized." securitization, the process of receiving a large number of individual loans and pooling is together. This process of securitization can be any type of loans like car loans, where a large number of individual loans are bundled and sold to be used as a package. If mortgage loans are created, this process "Mortgage Backed Securities. " If your mortgage is" securitized, "which is bundled with other mortgages. Very often, the bank sold its interests in securitized mortgage pool, usually in the form of bonds. Bonds
long-term debt sold by banks to investors. If an investor buys a bond, the investor, a bank loan.
banks sell bonds to raise capital. In other words, lend the banks money based on the "securitized mortgages." And how many homeowners borrowed money were not capable to pay banks to borrow money on the basis of "property", the less far value than the value of the bank have been argued that the value of the bond. is more than any other reason why the banks collapsed, went to make money. Some of the largest banks, were the largest portfolio of securitized mortgages even deeper into debt. They could not pay their loans to bondholders because the borrowers so that many had to pay the mortgages that were the basis of the assets of the bank. It was a house of cards began to collapse as borrowers could not pay their mortgages. The domino effect of the strengthening of the mortgage loans as a result of a deep crisis of the economic system. The basic cause of the global financial crisis makes use out of control. 20A5
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