The Examined Life Is it 2008 all over again? [Khe Hy]
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Apr 10, 2025 Dive into the lessons of the 2008 financial crisis, exploring the risky practices of banks that led to economic upheaval. Understand how subprime lending intertwined with securitization created systemic vulnerabilities. Discover the psychological impacts on individuals and the government's responses to the chaos. The discussion emphasizes the importance of cash flow in today's volatile markets, helping listeners prepare for potential financial uncertainties ahead.
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Lehman Weekend
- Khe Hy vividly remembers September 14, 2008, a Sunday night filled with uncertainty.
- Lehman Brothers' potential collapse loomed, sparking widespread fear and late-night conference calls.
Subprime Lending
- The 2008 crisis partly originated from subprime lending, loans given to high-risk borrowers.
- Low interest rates fueled risky behavior, including flexible, often undocumented loans.
Securitization's Illusion
- Securitization, packaging subprime loans into mortgage-backed securities, masked the true risk.
- This created seemingly high-quality assets from inherently bad loans, attracting a wider range of investors.