[MOVIE] I thought we are just buying a house?!

Honestly I don’t really like to watch this kind of movie. It seems to hard for me to understand, but somehow, err…no choice, because watching it with my baby girl family. Haha. 
HOWEVER, yea..there’s a  “ However” here…however I get attracted by this movie because it makes me keep thinking about the stock market, mortgage and anything related to it.
Tadaaa~ Recommended for you all

Seriously You will find it very bored and it contains many jargon which they used in business field, but guess what, there are a few famous artist are going to explain those special terms in a easier and simple way to lead you along the movie.
Lemme explain it in 2 minutes. It’s a story about how these four teams of peoples earn money while more than thousand millions of people losing their job, money, saving, home and some of them lose their life too.



THAT’S ALL. Yes. Short and simple. Windz’s story telling style. Haha
But try to look at it slightly further. Actually it is kind of warning that the subprime mortgage crisis and global economic crisis which happened on 2008 will be happen again, IF, we didn’t make a correct move.
Lemme briefly talk about the mortgage system structure.
 It is just simple like this, from the bottom (D) to C, CC, BBB, BB and to  the top (AAA). [Subprime mortgage] are for those peoples who might have a bad record in the bank or they might have too much commitment but yet they still needed loan for buying house. They are normally rated as B, C or D class, which means lower rating in the whole system structure, the interest of the loan are normally higher than those who are in higher rating. WHY? Yes, you must be wondering WHY THE BANK still approve their application to get loan?
For those who took the loan, they are actually paying higher payment, just to get loan. While Bankers are actually taking a risk with high income, where they bet that those who took subprime mortgage can’t afford to pay back the loan,  but yet, they can still earning because they had already earn more from the interest rate they charged and they can earn the compensate at the same time. 
Look back to the picture that I posted above, try to imagine again, if rating agencies, who assess the CDOs (Collateralized Debts Organization) and assign them credit ratings doesn’t assess it well, or the process involved any fraud, what will happen? Or I ask it in the simple way,  if the lower part of the system structure are taken out, do you think that it will affect the upper parts? The answer will be definitely YES! 

What is CDO? 

Tell you in a simple way: Smaller Bank wish to earn more money with lowering down their risk in losing money. They knew that most of the subprime mortgage loan takers will not able to pay the loan, sooner or later, so they form bond  to sell to investors, thru a middleman called CDO Manager. This particular bond  is for the buyer to bear the risk where loan taker couldn’t pay for the loan, but at the same time, if loan takers keep paying the loan, buyer will get profit from their loan’s interest.
Back to the topic, if the mortgage systems down do you think that it will affect the whole economic? YES!
Smaller bank want to borrow out loan to all applicant, they get loan from creditor bank also, so when they suffer from paying back to creditor banks, they will bankrupt. When this case happened, the requirement to get mortgage loan become higher, while price of bond decreased. Those bonds owners want to sell off the bonds they have and take back the money they invested. When investors did so, market crash, and it will lead to the crash of the Mortgage system.
And when the mortgage system down,  it will affect a country GDP (Gross domestic product) in a sense that people start to become poor, no people buying house, cars, and try their best to decrease their expenses. Investor or those who run business losing their customers, forced to cut costs, and the first thing is cutting down the man power, and then people start losing jobs and at last, Country economic goes slow and down. 
Source: http://www.cnbc.com/2016/01/18/china-reveals-key-q4-2015-gdp-data.html
Just recently, I saw from the news mentioned that China GDP hits 6.9%, lowest GDP ever since 25 years ago. Imagine, IF GDP of strong and big countries like USA, China, Japan, and etc drop, how much damages on the world economic will be? And IF world economic affected, what will be happen next?
EXACTLY…The Next Global Economic Crisis!
Is it too hard to be understood? Maybe you will have clearer picture if you read this! =)
If you wish to watch movie for leisure, I wouldn’t suggest you to watch this movie, but if you wish to know more, WHY DON’T?
So what would I rate for this movie? It is 8/10! ^^
It’s time for me to rest after long hours of data collecting and doing research on those related case. See ya in my next post. Stay Tune!

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