USA SUBPRIME MORTAGE CRISIS: A VIDEO

Just thought we ought to know what's causing the economic downturn.

and here's where you can read all about it!
SUBPRIME MORTGAGE CRISIS ON WIKIPEDIA

It's not easy to understand I'll say as much!
But basically, somewhere around 2001 people began investing in property. By 2005, everyone was buying houses they don't need with subprime mortgages (meaning banks were lending money at interests rates higher than what is atypical) This sort of lending is risky for both lenders and borrowers due to the poor credit histories of borrowers (meaning they may not be able to pay the bank back at the end of the day!) People thought they could earn a quick buck by buying then selling in a few years.. well they were wrong! Because so many couldn't pay back their loans.. banks lost money, and houses were repossessed to be sold at lower prices (low demand, high supply) Banks make losses so the currency devalues!
THIS IS ULTRA-SIMPLIFICATION. THERE ARE MANY OTHER FACTORS. I MAY BE WRONG!
and quite irrelevant (Macroeconomics) but interesting right?

I mean how can you not at least TRY to grasp the gist of one of the biggest contributors to recession?
Afterall, economics is all about applying what you learn to current affairs!! (at least this is true for me... personally..)

Jingwei