marketplacevideos asked:
Mortgages arent the only financial instruments that get turned into securities. Marketplace Senior Editor Paddy Hirsch explains how companies make money by buying credit card debt and bundling it. More coverage of the financial crisis is at marketplace.org/financialcrisis
Sue
Russell
Well i guess you can actually get away with paying a credit card debt, by demanding that the c-company provide you with a proof of debt or loss, right?
Anyway isn’t not kinda fraudulent anyway to securitize debt in this manner?
Comment by Kathleen — June 8, 2010 @ 5:07 pm
Gilbert
why dont you talk about comex and the guys that are being payed 25% more in cash then the contract is worlth?
Comment by Leo — June 12, 2010 @ 1:01 am
Lewis
how the hell does a student loan fall under an asset?
did you know that your birthcertificate # is traded on the global exchange
Comment by Eddie — June 15, 2010 @ 12:22 pm
Pedro
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Comment by Alvin — June 16, 2010 @ 11:25 am
Leonard
great explanation. but he did not explain how “dave” earn profit for himself? is it based on commission? percentage of A/R? or what?
I want to know.
Comment by Roberta — June 19, 2010 @ 3:07 pm
Marc
Yes, I would think so.
Comment by Julie — June 22, 2010 @ 6:26 pm
Floyd
it would be a shame to be unaware that any percieved ‘oppurtunity’ in the control grid is actually a profit in someone else’s point of view
Comment by Stella — June 22, 2010 @ 9:08 pm
Lillian
hey i’m new to this and i thought i just learned alot. now i read your comment and i think if someone explained to me in 10 seconds how this worked I might not have understood. so anyway, your comment basically is a public cry for “HEY EVERYBODY LOOK HOW AWESOME I AM OMG LOL” anyway i’m going to go back to learning what goes on behind the scenes with credit cards. like anyone who used them should.
Comment by Glenda — June 24, 2010 @ 9:45 am
Laura
a bit off topic. Do accounts receivables, in case of contracts between consumers and utility companies, show up on the asset side of the balance sheet (on annual statements)?
Comment by Hector — June 27, 2010 @ 7:21 am
Tom
So where is the collateral? Isn’t that the asset in ABS? Also, I’d like to see how a glass of champagne turns into a bottle of champagne to create a CDO. That would be fun…
Comment by Lucy — June 27, 2010 @ 10:06 am
Franklin
Paddy for chancellor of the exchequer
Comment by Bradley — June 30, 2010 @ 3:17 am
Jesse
can we move along a little faster please? this is a 10 second point made into a seven minute lecture.
Comment by Dorothy — July 3, 2010 @ 12:27 am
Cynthia
Top marks, Paddy. There is a lot of information out there, but none of them employed such useful and easy to understand metaphors as you did in this video. It’s exemplary, I find, that the senior editor of Marketplace has managed to explain this phenomenon in a way that anyone might be able to understand regardless of their background. Far too many media outlets have lost sight of smaller investors and ordinary citizens.
Comment by Walter — July 4, 2010 @ 12:25 am
Marjorie
Nice… I **** credit cards and now I know why.
Comment by Emma — July 4, 2010 @ 7:19 pm
Valerie
of course they fucking are, what do you think people are going to lend you money for nothing?
Comment by Heidi — July 5, 2010 @ 3:57 am
Greg
thank you for posting your videos. there are a lot of information that is clear and easy to understand.
Comment by Jonathan — July 7, 2010 @ 12:52 pm
Kenneth
how do the ABS handle the differing maturity(repayment)of the loan?
Comment by Raymond — July 8, 2010 @ 9:03 pm
Andre
so people out there are making money off my debt wow they find every loopholes to pinch a penny opportunistics parasites
Comment by Bernard — July 11, 2010 @ 4:28 am
Cindy
I think it’s comical that when he’s finished lecturing, he then tosses his marker.
So this is why citibank failed. It makes sense.
Comment by Gene — July 14, 2010 @ 6:57 am
Frederick
Thanks! You are the first person able to make me understand how the system works. The pyramid of glasses is a very effective example!!!!
Your english is clear and understandable!! Thanks again! Provenzano99
Comment by Shane — July 17, 2010 @ 1:14 pm
Pamela
I recon the bottle needs a good shake.
Comment by Dora — July 18, 2010 @ 12:27 am
Don
This video he is not for nor aginst credit cards and the debt they place on socity with intrest. He is mearly explaining how companies change cc debt into something that can be traded backed by collateral. Which is what really happens in the market everyday. Dont change the subject. Credit cards, loans, and debt exist. It is a way of life we have created and may have to pay for in the short future but the more the public knows about how the economy works the less “in need of a drink” we will be.
Comment by Francis — July 20, 2010 @ 8:37 am
Lloyd
does this system sound at all equal or fair? ask the question.. WHY SOULD THE PEOPLE WITH THE LEAST AMOUNT OF MONEY HAVE TO PAY MORE? because that is essentually what the credit score does. it is nothing less then modern day slavery. and that my friends is the ROOT cause of the mess that we find ourselves in today. this is about treating people differently. it is a system that is doomed to fail. and it wont make 1 bit of difference how much made up cash they toss at it. humpty dumpty is done
Comment by Hector — July 23, 2010 @ 7:53 am
Ann
there is a deep and serious flaw in that way of thinking. and im going to tell you what it is.. in order for people to HAVE to use the credit cards to begin with. you have to make sure that they don’t have enough money to begin with. and when they cant pay the bill because there is now an intrest added to it. what it boils down to is the people that create the money and get thier hands on it first use it to keep themselves in positions of power. and to charge people without money more for goods.
Comment by Arnold — July 25, 2010 @ 2:18 am