What are Mortgage-Backed Securities? (2008 Financial Crisis Explained) 

Amazing explanation !! I'm wondering if those who experienced the 2008 financial crisis had a smoother time compared to me at the moment. The stock market is causing me significant concern as my income isn't as high as it used to be. This worry stems from the fear that I might not have enough savings for my retirement since I'm unable to contribute more to my savings.

Basically , mortgage rates have reached their highest point since 1998, spanning 25 years. Considering inflation trends, there's potential for them to rise even further. Just a year ago, a 28year fixed rate was only 6%. This prompts the question: should I wait for a housing market downturn before buying or shift my focus towards the equity market?

Hands down the best and most simplified explanation of this content I've seen. Brilliant job.

I came here in order to understand the movie THE BIG SHORT

well done dude,now i can understand it,i was confused when i watch the big short for the first time due to its complex terms.

This video is like a compulsory trailer for The Big Short, and I really glad that I've watched this before seeing the movie

As concise as possible, given the complexity... Clearly explained. Great video!

Great job with the video, breaking it down and giving right examples. I had about 20% understanding of what happened but now I think I am at 75%. Thanks!

Best explanation on the 2008 crash and the different components that lead to and impacted the crash. I needed to explain this to someone and was looking for a simplified way to explain all of it. Now, I can just share this video with them.

I've watched a few videos about this subject, and yes I understood the basics and the background, but man your explanation was as simple and sharp as it gets. Very well done! I had no way of leaving this video without subscribing.

Your way of explaining is simply indescribable ....amazing work brother! Respect!❤️

This was a great coverage. Well done! Thank you.

Actually some really interesting stuff! Thanks for putting this together!

Excellent. Thanks for simple descriptive explanation, bcos this topics not easy to explain. Yet well done by you and your team.

This is an incredible video. Nice job. Super informative and easy to follow.

Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.

Very good explanation, man. Congrats for the video!

This video was well- explained and well-thought. I have learned a lot in a short video, plus your sequence of your explanations were clear and made perfect sense throughout. I salute you for a video well done!!!

This was so helpful thank you! All makes sense now!

Utterly enjoy this video. Simple and easy to understand.

Just one word for the efforts you've put into making this video. WOW !

Wow that was great - just saw 2 other videos that didn’t really explain properly but this explained a lot -thank you !

Thank you for all the examples and explanations!

Amazing! Thanks for the simple explanations. Keep doing it!

You are awesome dude! Wonderful explaination!!

Thank you so much for explaining it! You have made it so much easier to understand 🙏

Having watched several videos about MBS, I think this video is one of the best. The detailed explanation about MBS, CDO Collateralized Debt Obligations and Credit Default SWAPS is great!

This video is so underrated in term of views. Well done, you just make it easy to understand.

Amazing Video! Super easy to understand and the visuals helped a lot! This summed everything up!

You are amazing. I understood everything pretty clearly. Thanks a lot 🙏

Ur just amazing you helped me alot with my homework and with understanding the big short ...keep ''learning things'' as u love to do and keep informing the new students with you amazing summaries ..Regards from middle east

This video was stellar! Thank you

Thank you so much. Explained the concept in the finest way.....thank you.

Beautifully explained! Thank you!

Great video. Very well explained. Thanks!

Amazing quality you're on the road to a million subs

Excellent explanation, thanks for making this episode

Thank you so much!! Very helpful especially the oversimplified calculations:)

If I understand the 2008 crisis correctly, the same banks who made the bad loans (and got them rated triple A) also bought CDS on those mortgages. It was a double swindle. Not only did they knowingly make and sell terrible loans and lie about it, they also bet against their own product (the MBS) by buying CDS.

Thank you for making this complicated thing simple and easy to understand great job

Amazingly explained!

thank you so much for the video .. you explained it so much better .. others just confused me

bro such a simple and effective explanation.Nice work

it is a super clear explanation! Thank you so much!

Nicely done!

Amazing explanation! Well done sir.

this was great! thank u

I was completely blown away when I watched The Big Short. it seems almost surreal that such financial instruments even exist. you are not investing in something physical, you are literally investing in the confidence of people paying, you make money when others simply honour their commitments. Human Imagination is scary.

Very well explained. This video should get much more views.

Nicely explained!

Thank you! Great job explaining.

Very helpful and well prepared. Thank you so much.

Great video! Well done!

Very helpful video! Thanks!

Seriously even I'm here after watching the movie Big Short, as I'm not from US, I couldn't understand most of the financial terms used in the movie, but now I know what MSB is all about, thanks to you.

Amazingn content! This is the only video that helped me understand how MBS worked.

wonderful explanation! I finally get the core of 2008 GFC . Thx!

Excellent! Thank you.

Great video

This was a really well out together video. I'm watching this after watching the big short and now I understand the movie so much better

Phenomenally explained. Many 🙏 thanks

Fantastic video!

WELL EXPLAINED, TY

I dont know how to praise you for such an incredible video. Explanation at its best you deserve an award in this category.. great job 👏👏👏👏

Phenomenal video!

terrific video

Excellent quality video

Great content.

One of the best quality videos on youtube.

Not all heroes wear capes. Awsome video!

This explanation was brilliant

I never comment on videos, but I've watched about 100 videos on this understanding nothing, while you sir just made me understand the whole movie in 20 minutes! KUDOS!

very very well said

Brilliant explanation

THIS WAS BRILLIANT. YOU'RE AMAZING

Excellent video!

Amazing, clear and concise explanation! Many people are blaming MBS's and CDS's for the 2008 financial crisis, but do you think the crisis could have been avoided if the rating agencies rated the MBS's correctly such that the CDS's for senior tranches would be priced higher to reflect the increased risk?

Best explanation for technical terms in the big short movie.

Very accurate and clear

One of the best explanation videos I've watched in a while! Keep up the Great Work!

Nice! 💯

great video

Loved it

Thank you for making this video. Now I understand the bigger picture of MBS. Again thank you 💯💯💯

This stuff is so confusing to understand, so I wish I saw this video first! Now I gotta watch the big short again to REALLY understand it.

Currently studying CFA Thanks for explaining it

Thanks Bade Bhai for clearing the very basic of MBS and CDO. Its time for me to re-watch Big Short, Margin Call, Inside Job. Thanks Again. Keep Going.

Finally I understood MBS, think you

thank you

Excellent

I finally understood it. 😃😃😃😃😃😃😃😃😃😃😃😃thank u sir.❤❤

Amazingly explained....

Great !!

So, institutions and organizations bought securities which were backed on the assumption that housing prices would have kept increasing while homeowners would be able to pay for their homes. So they basically played a bet on people buying homes for profits. If that isn't ethical business conduct, I don't know what is. This is a great video, and more people need to understand what happened in 2008 because they would understand just how greedy businesses can become for profits and revenue.

Great explanation. However, you left out the fact that it wasn't just the banks that loosened their guidelines to make more money; the government forced them to loosen guidelines to allow lower income ppl obtain loans. This produced a massive amount of risky mortgages. There was blame all around.

wow god bless you

This video deserves to be standard course in schools

I am not based in US but I remember the 2008 crisis. That was the year I married. I never understood how it happened. This really made it easy to understand. Thanks

Great explanation! It would be great if you could talk about some of the other issues around mortgagees, around MBSs, CDOs and CDS's. a) Who ends up keeping track of (servicing) mortgages and making sure the right people are getting paid? This sounds trivial but it seems like it could become increasingly complex and expensive. When the mortgages are securitized and chopped up, etc., how can they keep all this straight? And who keeps all this straight? b) In the Big Short, they kept saying "and then the entire [bond/CDO] goes to zero." What does this mean if there are still mortgages that are not in default (which was how you showed it in this video)? c) Not explained here, but in the Big Short they talked about "synthetic CDOs" as side bets on CDOs, etc. Whose money funded those side bets? How did this affect financial markets, perhaps globally? d) Not explained here, what about the insurers who (I guess) were selling the CDSs (or buying the other side of CDSs sold by the banks)? And reinsurers. How did this work in reality? (Personal note: I lost a ton of money because I was holding the bluest or bluechip stocks at the time - AIG.)

Hello, Could anyone please explain the calculation of interest at 14:09 for Senior ,Mezzanine and Equity? I understand we get the interest $5/4 but when i expand the $5m and divide it by the number of shares i am getting different numbers. Also when i divide $5m by 3 i am not getting the same number as shown in the video? Thank you!