The CreditCredit Crisis“the US economy horror picture show”

by Ryan A Graves October 2008

It used to be...

Get a loan from your loan officer (simple)

People buy homes with good credit

Then...

Banks begin lending to people with BAD CREDIT (ARM) – Adjustable Rate Mortgage

NO PROBLEM

Banks promised that housing prices will continue to rise.

Banks start selling MORTGAGE BACKED SECURITIES*

*Investments of packaged home loansThese are fine if the housing market goes up...bad if it doesn't.

2001 TECH SELL OFF

9/11 shocks US and world economies

Fed drops interest rate to

1

Investors buy lots of mortgaged backed securities ...with very high fees

Real estate soars 10 – 20% from 2002 - 2006

Home owners spend like celebs using Home Equity Loans

Credit Bubble Housing Bubble Credit Bubble

So this happened...

Fed increases interest rate to

5.25

Adjustable Rate Mortgages increase with interest rates

HomeOwners can't pay their mortgages

Home owners are forced out of their homes

Past Due sub-prime mortgages rise to

18.8% in 2008

Estimated bank losses

$500B +

Wall Street banks go under

FAIL FAIL FAIL FAIL

And now?

US Government digs deep to bailoutbailout the large financial institutions

to the tune of...

$750B +$750B +

Neither presidential candidate really has a clue what to do...

Lets hope this thing works!

THANK YOUTHANK YOUsee more at see more at

http://ryanagraves.com

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