Flowchart Of Financial Crises

[editec]

I found this a useful visual aide to understanding the dynamics of our current financial crises.

I hope this does help some of you to understand that there is more than ONE root source of the current problems our economy is facing.

If you read this chart, and take the time to understand it, it will show you that there's plenty of blame to go around...

 

[Toro]

That's pretty good. Have you got a link?

 

[AVG-JOE]

The quality of the research and graphics work that goes into things like this are proof that America needs 10% unemployment just to have time to be creative.



-Joe

 

[editec]

That's pretty good. Have you got a link?

Yeah, sorry I didn't remember to include it.

Visual Guide to the Financial Crisis | FlowingData

I love charts.

They can sometimes cut through the ten trillion words it takes to explain something and make the data more meanful to more people.

This chart does not include the derviatives that I think are the real problem banks are facing, but I think it does show those willing to study it for a while that there are at least two major institutions which failed to do their jobs properly: the FED and the Bonds ratings agencies.

One could argue, as I often do, that the banks ALSO failed miserably to protect their stockholders and the people who bought their bonds, but that's not so immediately apparent in this chart.

 

[editec]

The quality of the research and graphics work that goes into things like this are proof that America needs 10% unemployment just to have time to be creative.



-Joe

Tell me about it.

Had I not gone slightly nuts, Rosetta Project wouldn't exist.

Best thing that ever happened to me was becoming too sick to work.

I could have spent my whole life making money and not doing anything particularly beneficial to anyone but myself and my employers.

 

[Toro]

I love charts.

Yeah, me too. There is one forum I go to where they make fun of me for posting so many!

 

[RodISHI]

Great chart. It gives a bit of understanding for people to see the chain of events. Thanks you for the info on your project too.

 

[GHook93]

It left out some of the big causes:
(1) The Acts of Congress that required banks to lend money to the lower end of the specter - meaning subprime people would could afford it.
(2) Banks offering 100% financing, 125% financing, 2 years ARMs with margins set right under the interest rate, subprime loans and my favorite stated loans (so if you can't show enough income to make the well worked out income matrix work, let's just make up what you make; McDonald's working the fryer yep $5K a month after taxes sounds right).
(3) Ameriquest Mortgage and New Century entering the scene making uncanny amounts of money off the subprime market. This enticed the Big Banks aka Wells Fargo, Wachovia, Washington Mutual, Countrywide, Citi, BofA etc. to toss caution (and their risk matrixes) to the wind and invest big time in the failed concept of subprime lending! Hell the Ameriquest Mortgage and New Century Fat Cats (who will one day be in hell) are making this much money why shouldn't we jump into this too risky to be turn concept!