

Ask HN: What do you still not understand about the Financial Crisis? - aspiringsensei

Are HN-ers still largely in the dark about what happened inside of a CDO^2? What happened to all of those mortgages the treasury bought?<p>What still doesn't make sense to you about the financial crisis?
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augustflanagan
A lot, but the This American Life series on it was incredibly well done.
Definitely better reporting than any other news agency out there.

[http://www.thisamericanlife.org/radio-
archives/episode/355/t...](http://www.thisamericanlife.org/radio-
archives/episode/355/the-giant-pool-of-money)

[http://www.thisamericanlife.org/radio-
archives/episode/375/b...](http://www.thisamericanlife.org/radio-
archives/episode/375/bad-bank)

[http://www.thisamericanlife.org/radio-
archives/episode/365/A...](http://www.thisamericanlife.org/radio-
archives/episode/365/Another-Frightening-Show-About-the-Economy)

*My personal favorite -[http://www.thisamericanlife.org/radio-archives/episode/405/i...](http://www.thisamericanlife.org/radio-archives/episode/405/inside-job)

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aspiringsensei
The Magnetar trade was fascinating, and I humbly submit that any reporting
done by This American Life is likely to be better reporting than any other
news agency out there.

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johngalt
If mortgage paper was trading for much less than face value why not allow
people to buy their debt back? Thereby creating increased demand for the
"worthless assets"; at the very least it would have created a pretty solid
floor for the value of these types of investments.

It also would've helped the freefalling house values because it would have
given underwater homeowners a chance to be part of the solution rather than
part of the problem.

We all ended up buying the debt back anyway, we just used the federal
government to do it.

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AlexMuir
Buy it back with what? Nearly everyone would need to get another mortgage to
buy back their debt.

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wdewind
What if we had taken the bailout money and simply paid the debt directly back,
instead of lending it to the lenders, and leaving the original debt still in
tact. Wouldn't the companies have been saved as well as the debtors if we had
simply paid back the mortages with the bailout money?

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nkassis
One thing that bothers me is why job creation hasn't started up again. Only
reason I could come up with is that companies don't need more employees, they
manage with what they have. I'm guessing that productivity is increasing.

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CyberFonic
Productivity is definitely decreasing (dropping morale, etc) but then so is
demand! When there is less money to go around, there is way less demand.

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aspiringsensei
A parallel reddit thread:
[http://www.reddit.com/r/AskReddit/comments/d34k0/what_do_you...](http://www.reddit.com/r/AskReddit/comments/d34k0/what_do_you_still_not_understand_about_the/)

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Evgeny
Why does the period of economical growth is inevitably followed by
recession/depression? Why is it not possible to, maybe, regulate the economy
so that economical growth would be slightly slower during the growth period,
but use that artificial slowness to cushion the potential recessions?
(Probably sounds very amateurish, but I have no economics background further
than reading "Marketing" by Kotler)

