Outline • What lead us to the crisis? • Background (How it started) • Parties/Players • End result • What can we learn from this?
How it started • Late 1990’s – internet bubble bursts • US economy in trouble • Federal Reserve (equivalent of our Central Bank) reduced rates to stimulate the economy • Reduced rates = low mortgage rates
Global Financial Crisis “AAA” Mortgage Lenders/Banks “AAA” Sub-prime Rating Agency S&P, Moody, Fitch
What to do we learn from this? • “If you can’t afford it now … borrow against future earnings”. • The Bible says Proverbs 13:7 (NIV) 7 One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.
How much do you spend? The Millionaire Next door by Stanley and Danko
What to do we learn from this? • “Acquire as much wealth … as fast as you can … whatever it takes ” • The Bible says Proverbs 22:16 (NIV) 16 He who oppresses the poor to increase his wealth and he who gives gifts to the rich—both come to poverty.
Who wants to get rich quick? • “The reality is that 70 percent of all lottery winners will squander away their winnings in a few years,” the Connecticut financial advisers said in a news release. “In the process, they will see family and friendships destroyed and the financial security they hoped for disappear.” By DEENA WINTER / Lincoln Journal Star (Saturday, Feb 25, 2006 - 07:11:08 pm CST)
Where are you investing on? • Luxury • Vices • Retirement • College fund • Charity
How much is 1 pack/day? Computed at P 30/pact and 4% interest rates
What to do we learn from this? • “Material things provide you a complete sense of satisfaction” • The Bible says 1 Timothy 6:17 (NIV) 17Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.
Closing • 2 Timothy 3:16 (NIV) 16All Scripture is God-breathed and is useful for teaching, rebuking, correcting and training in righteousness, 17so that the man of God may be thoroughly equipped for every good work.