(Sub-prime)

Friday, 04 April 2008 14:00 -

" Loan

Sub-prime Mort age

Investment Bank
Credit Crunch

Economic Slow Down

() "

Recession
Wall Street stock

Federal

Reserves (0.75 basic-point) .

() ()
(0.75basicpoint)

Sub-prime

Sub Prime ?
?
? ?

Sub-prime

Recession Recession

Sub-prime ? ?

Model

()

()
Supply & Demand -

() ()

Adam Smith Wealth of Nations

()

&

Bust

Cycle

Boom

& Thrift Boom/Bust

Tech (Internet) Boom/Bust 2008 Housing

Real Estate
Boom/Bust

Boom Bust ?

 Boom Bust ?
Boom Bust

Wealth

Creation

() ()

()

()

Boom

Boom

()

() () Boom
Time

(/)

Tax code

% %

Boom - Time

Boom Time

 Boom Time

Bust

Bust

Bust Bust

Bust ?
Bust () Boom

Credit Crunch
Boom Time

Bust

Slow Down Recession Depression

? ?

Regional Federal Reserve

(Federal Open Market

Committee) Monetary Policy

Monetary Policy Fiscal Policy

Monetary policy Fiscal policy

(.)

()

Gross

National Product

() -

(1Trillion = 1000 Billions; 1Billion = 1000 millions (American Unit))
. .

. ()
.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
. (-)

(-) ()

(-)

CIA fact book $13-14 Billions (official exchange rate) Official

Exchange Rate (-)

Currency

Federal
Reserve liquidity

()

()

Bust

Credit

Crunch

Stimulus Package

(Tax Rebate)

Credit

Crunch

Sub prime

Credit Crunch Slow Down
Recession Recession
Global Economy

Bust Sub-prime ?
() American Can Do Altitude

American Dream
American Dream

()
Credit History

()

(Risk)

Credit History Prime lender

Credit history - Risk
Sub Prime Mort age


American Dream

()
() Credit History
()

Mort age Company

Mort

age

( ) Down
Payment Service Fee

() Front-loaded
() ( )

() () Equity

Primary Mort age Market ()
ABC () ()

() Service Fee

American Dream

()

Secondary Mort age Market

()

GSE

Government

Sponsored

Enterprise

Fannie Mae ABC

Loan ABC

ABC () ()

() Fannie Mae

() () ABC Mort age Company

Up-front Service Fee

Fannie Mea Company

ABC Company Fannie Mae

Fannie Mae Mort age Back Securities Bond Investor

Bond Secondary Market

()
()

VA Loan

FHA loan
Complex

Fannie Mae Fannie Mac/ Ginny Mae/ Ginny Mac GSE

Secondary Market Fannie Mae Private Banks

ABC Mort age
Fannie Mae GSE

() Banking System

Credit History

()

Housing Boom

Boom
()

Technology Boom
Y2K

()
( )

Y2K

Y2K

Liquidity

(Tele-Communication-Sector)

Deregulation


ATT/ Sprint MCI

Tele-Communication
Boom

Financial

and

Capital

Market

Option Market Derivatives

/

Hedging

Arbitrage/

Speculation

Stocks & Bonds

Clinton

Boom

Bust

Short

Economic Downturn Ordinary Investor

Investment Club ()

Boom

Credit History

Down Payment () ()
Fixed Rate ( )
() ()

Fixed Rate ARM (Adjustable Rate Mort age)

()

 Down Payment

Credit History

Secondary Market

Mort age Back Security

Boom Bust
Boom Bust

Housing Bust

Investment

Loan

Sub-prime Mort age

Investment Bank

Credit

Crunch

Economic Slow Down

()

ECB (Europe Central Bank )

liquidity
( )
basic point)

(0.75

() ()
Tax Relocate

 Economic Growth Another Boom Bust

Bust Hedge Funds

()

Sub-prime