Summary of "The Crisis of Credit Visualized"

In this post I am going to compare my first version of a summary of the video "The Crisis of Credit Visualized" with my corrected version. 


My first attempt

The video “The Crisis of Credit Visualized” explains the credit crisis, a worldwide financial fiasco that occurred in 2008 and affected everyone.

After the Dot-com bust in 2000, Federal Reserve decreased the interest rates of treasure bills to one percent. Because of this, investment bankers started to borrow large sums of money to buy mortgages. These mortgages where put together into a “box” called Collateral Debt Obligation. The CDO was divided into three slices: a safe slice, an okay slice and a risky slice, which were filled with monthly payments of homeowners and sold to investors. 

At some point there was no demand for mortgages anymore, so lenders started giving out mortgages to irresponsible homeowners. If they defaulted on their mortgage, the investor received the house. However, more and more homeowner defaulted, causing a higher supply of houses and house prices dropped. The investment banker could not sell his houses anymore and on top of that, homeowners who could pay their mortgage chose to leave their houses because their mortgage was now higher than the worth of the house.

Nobody lent and borrowed anymore which caused the economy to freeze, everybody went bankrupt and the investments of homeowners were worthless. 

My first attempt of summarizing the video wasn’t a complete failure, but it obviously wasn’t a complete success either. When I watched “The Crisis of Credit” for the first time I was actually surprised at how quick I could follow Jonathan Jarvis’ explanation of the credit crisis. It was probably the easiest way to explain a complicated economic event like the crisis to people that don’t have much previous knowledge about it. But despite it being that simple to understand I still faced problems when I tried to summarize it. 

My first and probably biggest problem was that I had trouble figuring out which information I had to keep and which I could leave out. Looking at my first version of the summary it’s clear that I made some wrong decisions in that department. I left out important details in the beginning, but included useless blah blah at some other points. 

Besides that I made many stupid mistakes. I was concentrating so much on the content of the summary that I didn’t pay so much attention to my grammar which resulted in some pretty embarrassing errors. I confused prepositions that I normally should be able to use correctly and even had some typing mistakes. 

On top of that I was a bit sloppy with researching or didn’t listen close enough to the correct terms Jarvis used in his video, because I had some errors there as well.

In general I didn’t work precisely and concentrated enough. 

My corrected summary

The video “The Crisis of Credit Visualized” by Jonathan Jarvis explains the credit crisis, a financial fiasco occurring in 2008 that affected everyone.

After the dot.com bust in 2000, the Federal Reserve lowered interest on treasury bills to one percent, so investors searched for other investments. By contrast, banks on Wall Street borrowed more and made good deals with the money. Investors also wanted good deals, so Wall Street connected them to home owners through mortgages. These mortgages were put together into a “box” called a Collateralized Debt Obligation. The CDO was divided into three slices, which were filled with monthly payments from homeowners and sold to investors.  

At some point there was no demand for mortgages anymore, so lenders started giving out mortgages to irresponsible homeowners. If they defaulted on their mortgage, the investor received the house. However, even more homeowner defaulted, causing a higher supply of houses and house prices dropped. The investment banker could not sell his houses anymore and on top of that, paying homeowners chose to leave their houses because their mortgage was now higher than the value of their house.

Nobody lent and borrowed anymore causing the economy to freeze and everybody went bankrupt.

To improve my summary, I first looked at the corrections Henry made and quickly corrected the grammar mistakes, the terms I got wrong and took out my unnecessary blah blah. Then I watched the beginning of the video again so I could rewrite my first paragraph where I had left out some important details.  In the end I took out some words here and there to make sure I reached the word count. 

Looking at my first summary, I definitely understand what I did wrong and I know in which areas I have to put more effort into. Still, I think it will take me a few more summaries to really write an excellent one.