Chris Haroun explains how Wall Street's financial maneuvers create systemic risk that harms ordinary people. A 1% rise in unemployment correlates with 40,000 additional deaths. When housing crashes, foreclosures and job losses cascade through finance and construction, while pension funds and 401(k)s invested in mortgage securities and bank stocks face collapse.
People lose pensions. You know what I hate about banking? It reduces people to numbers. Here's a number. Every 1% unemployment goes up, 40,000 people die. Did you know that? And Ben continues to list the very real human costs that will come if their bet pays off. Now a crashing housing market means foreclosures, meaning families losing their homes. It also means layoffs as the financial and construction sectors implode and destruction of wealth, meaning retirement funds and pension funds invested in these safe mortgages securities will plummet. And this is a lesson of systemic risk and interconnectedness. The characters are not just shorting an asset, they're shorting the core of the economy. So the fallout will hurt millions of ordinary people. Now when he says people lose pensions, he considers that many pension funds had loaded up on Triple A rated CEOs and mortgage bonds. Trusting the ratings, it was all BS and a collapse would wipe out a portion of retirees income. Similarly, retirement savings referred to as 401ks and IRAs likely invested in bank stocks or real estate that would crash. Everybody gets hurt.
