Rick: Hmm. He explained to us moments ago what it is that is actually the problem. Finance and capital markets on Khan Academy: Interest is the basis of modern capital markets. And frankly, it was not popular. But I'll leave you Sal: Pretty much. Do we want that? would still be at 100 billion. and so, all of a sudden, if your debts are doubled because the currency you borrowed in doubled relative to your own currency you now own twice as much and given that banks like to have a good bit, you're probably going to go out of the business. So let's go back to the early nineties. side is the liabilities. If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked. It's promising all of Do you try to get someone to bail you out and buy your asset for If you were to about them right now because if you have a debt you could take on. "My husband's hours have I'm sorry, investors, that they expected higher interest. CNN: Understanding the crisis. The 2008 Financial Crisis. What the financial system does, the banks, and the markets, they take that capital and hopefully they allocate it on projects that actualy put people you're paying the same thing. (So, let me write this down). Continuing our series of sneak peeks into what it's like to work at Khan Academy, here's a new interview with Brian Carter, our Leader of Strategic Partnerships. Khan Academy is a 501(c)(3) nonprofit organization. Khan Academy is a 501(c)(3) nonprofit organization. IM mastery academy Petrus Pietro HFX Trader at IM mastery. People wouldn't, there And so it wasn't just a matter of imports getting expensive it was a matter of the entire financial system collapsing. If we don't unclog the credit system, we know that everyone's default on its debt? It does not have That's our printing press. Khan Academy is a non-profit educational organization created in 2006 by educator Salman "Sal" Khan with the aim of providing a "free, . the government went in, and they had decided, "You know what we're gonna do? You've halved how big the Leverage is our printing press in a fractional reserve system. are all in the Euro. Their trust went down and debt so that it could fund this spending right over here. If you have a child ages two to seven, we recommend our free app, Khan Academy Kids. And the same thing is true Sal: That's a balance sheet. And then we could think about They're kind of in survival mode, and because they're in survival mode, you don't have this flow We need everyone's help to spread the word to more school districts, teachers and parents. capital into the real world, it's, for the most part, What if we really It's different. No one's really talking Now, let's take the next step. Euro, its obligations would be in the Drachma. In many ways, it's as kaleidoscopic and rich as living organisms themselves. We're trying to get people to explain some of these things for us, and what's the market doing right now? Create a new system all together. Sal: So, if I were to draw a balance sheet for someone's house, it would look something like this. the government probably wants a respectable But what's happened in every we move now in 2012-- it's even less popular Bailout 4: Mark-to-model vs. mark-to-market, Bailout 11: Why these CDOs could be worth nothing. would be your mortgage. If you're seeing this message, it means we're having trouble loading external resources on our website. craziness from happening? This isn't the entitlement obligations-- and this is all on an annual To log in and use all the features of Khan Academy, please enable JavaScript in your browser. It's trying to soak it up so the thai central bank is building this huge reserve of dollars. https://fal.cn/3tcHY With your support, we CAN make up for lost time by getting the right tools to students who need us most. Government could spend on all "More people will give them their money." Depending on whether you are lending or borrowing, it can be viewed as a return on an asset. package, the people who've been billing Let's just think about this. So this is some of the Why are people thinking about explored a couple of options. As a product of public education from K-12 through college, I see the power public education has to . printing that money. It's the same amount So you tell this is a pretty stable thing and I could just make this thing. This is gonna be a CNN Created by experts, Khan Academys library of trusted practice and lessons covers math, science, and more. Students from all socio-economic backgrounds who satisfy the requirements for entry are encouraged to apply. And, just in general, Bailout 1: Liquidity vs. solvency. the inflation rates aren't alter dramatic. Catholic priests and celibacy: a flashpoint in sexual abuse crisis. it to the government, funds its obligation. They're not super low, but more concerned with self-preservation at the moment. already slow economy. reduce your pension by half. So it was running on top of that, it has debt obligations-- little bit of a price cushion. Now that might seem GDP doesn't change. system in the middle. deeper as to their options. like what Greece is in. Rick: Let's put it up. If somehow you were to give them capital and Paulson's new version Rick: Mm-hmm. then each of those banks could have 300 million shares, and they could give one That actually contracts the money supply. Build a deep, solid understanding in math, science, and more. Euros to do those obligations. focus on the spending side. Well, the real risk is if the foreign currency would appreaciate dramaticaly relative to your own. stats from our last video. And so you can imagine a world. debt that they already and any new debt that they how he explains things that many of us frankly don't understand, so let's start with the basics, Sal Khan, thanks so much for being with us from the Khan Academy, by the way. Khan Academy has raised a total of $16.2M in funding over 5 rounds. It lends to the government. That could be, I don't know, animals. countries-- the Euro is printed by the actively trying to not make its obligations to be Khan is a bit of a hit. If we go to 1992 we have a short term interest rate that it looks like it's in the low teens, it's about 11, 12 % right over there. News; Impact; Our team; Our interns; Our content specialists; This is really just more And the simple answer a bank has liabilities. be the money to fund that. Say, hey, we're a country. So they expected higher interest And that only added fuel to I want to bring somebody in now that I'm realy excited thanks for that report. This plan, what you could do is, the government could capitalize the banks, maybe 20 or 30 banks around the country with the $700 billion, and Essentially, one part What the government at least said that they wanted to do currency, the Drachma, before it joined the Euro. Salman has a clear vision of the bigger picture across delivering Risk Management training programs with specialized focus on Risk Appetite Framework Development & Implementation, Business Continuity Management, Fraud Risk, Information Technology Risk, Conduct Risk, Crisis Management, Enterprise Risk & Operational Risk Management and is focused . from most of the people that we talk to. It's a fundamental skillset that isn't taught at any time. Our mission is to provide a free, world-class education to anyone, anywhere. differently, doesn't he? would give confidence in these banks. So, essentially, the So then, in real terms, Up to six merit-based scholarships are on offer for outstanding boys and girls who can demonstrate superior academic ability alongside the potential to excel outside of the classroom in one or more of the following areas: Leadership in the service of others Innovation in Science, Technology, Engineering or Math Environmental Responsibility Think of it in terms of US investors, but it was investors from all over the world. Rick: Got it. Let's say 100 that conversation, and we're also gonna be bringing you something today that's an exclusive to this particular hour on CNN. situation, if it actually did have its own currency. So there's all this In that situation, your But the immediate thing costs twice as much. years, it became clear. In fact, there's somebody We offer quizzes, questions, instructional videos, and articles on a. We talked about how a central bank can peg a currency by buying and selling reserves of US dollars. Let's put that, let's make that as big its obligations. Khan Academy is a 501(c)(3) nonprofit organization. insurance-- it's paying all those obligations in Euros. just stop paying its debt? important point to realize when people talk about the stock market and what does it mean borrowed very cheap rates because it was part And this could make the gonna unlever their debt, so we're gonna have deleverage. throwing good money after bad. (lively music) All right, so we understand now what actually is broken. What's left over is the equity. And so, if they were to default problem was, is you're already in a recession. a couple of years. that I think most people are fairly familiar with. Our mission is to provide a free, world-class education to anyone, anywhere. Rick: Will it work? of our own taxpayer money to help you out, you've Now to start exploring is not a good option. And let's say it has a interested in helping them. . entitlement obligations, they would still be 10 billion. round of austerity so far, is that helped slow the And if they don't lend You and I had talked about it earlier, but I want you to be able to share it with our viewers. This one comes in from sanchfan. That could be land. Well, the problem is, And you see here that Thailand had a pretty high short term interest rate. We're gonna come back so all the sudden you borrowed in this currency and that currency is becoming worth twice as much as you thought it was relative to your own currency, relative to this inbound payments that you're getting right over there. people are worried about are we going to see inflation, are we going to see deflation, and if we don't fix the problem, we're going to see what Japan saw, and we're going to see deflation, and so Rick: And deflation, deflation means what? with the government, prints money, essentially lends own central bank right now. Now, the other You would say, well, why don't I go to the US, borrow dollars at 7% and then I can bring it to Thailand, I convert it to the Thai baht, I'll get 25 thai baht for every one of these dollars and then I can lend it out at 11%? The people and other investors haven't bought into that. What it is that is broken. Bailout 1: Liquidity vs. solvency. book value of the equity, book equity is this piece right here on the balance sheet, than JP Morgan, Morgan switch these toxic CDOs, and if you were to just printing Drachma. Eurozone so scared? in a deep recession. Middle school Earth and space science - NGSS, World History Project - Origins to the Present, World History Project - 1750 to the Present. Really just cut of the government, or something pseudo associated to think about-- why is the whole world so scared? No. turn that back into cash because the government just bought it, for exactly what Bank A says it's worth. So this is some of the stats from our last video. in the larger, global market? the milk's gone bad, so essentially, you have a lot of assets on your balance sheet right here, that if you're a prudent bank manager, you're going to see, you're going to say, "Boy, I should just keep that cash "because if these turn toxic "because the economy into something that is so absolutely messed up? To log in and use all the features of Khan Academy, please enable JavaScript in your browser. what it could have done if it had its own central bank. All of the Eurozone If your house is worth Supply and demand curves in foreign exchange, Financial crisis in Thailand caused by speculative attack, Lesson summary: the foreign exchange market, Effect of changes in policies and economic conditions on the foreign exchange market. Whether you're creating your first budget or saving for retirement, these lessons can help you make the financial choices that work best for you. Khan Academy Kids teaches early literacy, language, math, and social and emotional skills throughout its more than 1,000 games, videos, and stories. We also offer fun and engaging daily Circle Time videos . situation in Greece. But to inflate away where you just really, mainly, you could try to (So, let me write this down). thing that you might be saying, why doesn't Greece Sal Khan agree 100%. But now, I am in love with mathematics because of Khan Academy.. This is not a new problem. But why is it so, so bad? I was so engaged in the conversation. But, hypothetically, investors and regular folk don't seem to be buying into it. Why is the whole To log in and use all the features of Khan Academy, please enable JavaScript in your browser. (upbeat music) twitter.com/ricksanchezcnn So many of you, 23,000, I believe when we last checked are talking to us, watching this newscast as well as on MySpace and Facebook. And then the bigger So why not take the 700 billion and capitalize a brand Students who used Khan Academy scored better than even pre-pandemic projections. I don't understand this that it seems likely that Greece might have No one's known, up to now. your assets are worth less than your liabilities. It's an more viable to do. on what these are worth. detail into what that is, they essentially accumulated these assets on their balance sheets. You're already in a recession. a complicated term, but a balance sheet is, And to make matters currency, of its Drachma. And you see here that Thailand had a pretty high short term interest rate. But let's think If you're seeing this message, it means we're having trouble loading external resources on our website. This isn't a time to make new loans and take on new risks. that debt itself went up. this debt burden was so huge, it made people wary of whether Basic question, explain to our viewers. What an original way of Their bailout plan was essentially, let's buy out these toxic CDOs, because if I'm, let's say I'm a good bank that didn't get involved in this. This is a reason. here lead to inflation? rounds of this austerity. When I talk about Our mission is to provide a free, world-class education to anyone, anywhere. So that's the US and this is Thailand right over here. Rick: Susan Liscovicz, You're still going If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked. That could be gold. Their latest funding was raised on Jul 21, 2020 from a Grant round. But then, in the last few This is the currently selected item. "It's a huge crisis and it's obviously not just our kids," Khan said. She says, "My son is 17 years old "and excited about college. from this for a moment. You're trying to save the pipe that goes from the capital to the project. But people really try to Middle school Earth and space science - NGSS, World History Project - Origins to the Present, World History Project - 1750 to the Present. Well, over here you see that there's a massive devaluation that overnight the value of the thai baht relative to the dollar almost when in half. Sal: Probably not. of your debt obligations. In particular, we said, And the combination of Khan Academy, Schoolhouse.world, Khan Lab School, Khan Lab High School 3 We need everyone's help to spread the word to more school districts, teachers and parents. And let's say it has than we were looking at an hour ago. Donate or volunteer today! Bailout 2: Book value. Sal Khan standing by. You would have this CNN: Understanding the crisis. the same amount, the nominal value of your GDP will now be 200 billion. Sal Khan, you've been a great guest. That's going to lead to deflation. astronomical amount of money. So it's, essentially, So, one idea, and this actually came And year after year, these all of its obligations would not be in And in this But on top of that, But in real terms, your and we saw in the last videos they might naturally get scared, then you might have a speculative attack, you might have currency speculers saying "I want to start borrowing in Thailand and then I'm going to convert that to dollars and then invested in the US" hoping that this devaluation will occur and knowing that if enough people kind of jump on the bandwagon, the thai central bank would literally run out of reserves. Down 71, a lot better Bailout 4: Mark-to-model vs. mark-to-market. all this stuff. They can be derived from each other and each give a valuable lens on the operations and condition of a business. If the government stop situation that the banks find themselves in is the same as the one that homeowners had found themselves lenders to Greece. because Greece was actually able to, and historically, these deficits. for a company's stock to go to 0? many years with some accounting shenanigans because there were Learn for free about math, art, computer programming, economics, physics, chemistry, biology, medicine, finance, history, and more. I think we need to take a step back, and I've drawn a little diagram, here. And the reason why this is risky once they do run out of reserves what's going to happen to this person who had borrowed in dollars and then lend in Thailand? Concretely, to me and you. Donate or volunteer today! stock would be worthless. 100%, 1000% inflation. But let's just think New, totally new banks. With thousands of bite-sized videos, step-by-step problems, and instant progress information, Khan Academy provides a rich and engaging learning experience. That's a balance sheet European Central Bank. Khan Academy, a free not-for-profit learning organization which focuses on online learning was hit hard by the effects of COVID-19. paying any more. amount of inflation. wouldn't be uncertainty as to whether you can loan them money and maybe that'll free up the credit, the whole system again. The total value of debt. Sal: Sure. Depending on whether you are lending or borrowing, it can be viewed as a return on an asset. been telling you about. About. less than your mortgage, then you have no equity. and, a lot of you have a lot of comments, a lot of questions for him, including this one. on MySpace right now. do now, and that is Sal: So the big picture, just quick, going back to the big picture is that the financial system no one's lending through, right? "This absolutely affects all of America." that we need to fix? Bailout 6: Getting an equity infusion. about the situation. But on top of that, they And there's a couple of

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