Aside from the wonderful graphics this video provides an excellent overview of the credit crisis, what motivated it, how it expanded and why the whole house of cards collapsed.
What’s missing early on is an explanation of the 1% lending rate set by the Federal Reserve. After viewing this video you should ask yourself are few questions…why was the interest rate at 1%? What motivates the Federal Reserve to set rates so low? Would the marketplace have set a more realistic (read higher rate) sooner thereby putting the brakes on the situation before it became wildly out of control?
In short, would it all have happened if the marketplace truly established the cost of borrowing?
If you ask yourself those questions and do a little research you may determine that central control of the cost of capital (the Federal Reserve) is not the most efficient way to allocate capital.