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(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