Can the words “financial crisis” and “delightful” really live in the same sentence? They can when describing designer Jonathan Jarvis’s charming and informative thesis “The Short and Simple Story of the Credit Crisis,” completed at the Art Center College of Design in Pasadena, California.
Using a clear visual vocabulary, Jarvis describes in layman’s terms just how the financial crisis came to be.
Instead of lending to responsible homeowners, called prime mortgages, they started to get some that were, well, less responsible. These are sub-prime mortgages. This is the turning point.
So just like always the mortgage broker connects the family with a lender and a mortgage, making his commission. The family buys a big house. The lender sells the mortgage to the investment banker, who turns it into a CDO, and sells slices to the investors and others. This actually works out nicely for everyone, and makes them all rich. No one was worried because as soon as they sold the mortgage to the next guy, it was his problem. If the homeowners were to default, they didn’t care. They were selling off their risk to the next guy and making millions, like playing hot potato with a time bomb.
Take a look:
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
