Saturday, November 12, 2011

RJA #12c: Visual Aids

I think that there are many visual aides that I  will be able to include in my paper. I will use the vast resource of graphics that are available on the official Financial Crisis Inquiry Commission website: http://fcic.law.stanford.edu/resource


One set of  graphics that I found that I believe will be very informative to the readers of my paper describe the ways in which the mortgage securities operate, i.e. one called 'THE THEORY OF HOW THE FINANCIAL SYSTEM CREATED AAA-RATED ASSETS OUT OF SUBPRIME MORTGAGES gives a detailed picture of how exactly these mortgage backed securities came to have AAA ratings.
Another graphic in the mortgage securities set is one titled COLLATERALIZED DEBT OBLIGATIONS and shows a simplified version of how CDO's work.
A third graphic I plan to use is titled  REJECTED LOANS WAIVED IN BY SELECTED BANKS, and it is a table of the percentages of loans 'waived in' or approved, regardless of the fact that the borrowers were denied in the application process.
Another graphic that I really like is the one titled LOAN PERFORMANCE IN VARIOUS MORTGAGE MARKET SEGMENTS. This one is a bar graph showing that the subprime segment had nearly a 40% average delinquency rate in 2009, among other figures.
Lastly, I will use the graphic titled NOTIONAL AMOUNT OF OTC DERIVATIVES OUTSTANDING, and it shows  the sheer volume of market value that derivatives held in these years. 

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