i’d have this guy to compete with
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a tree eating salesman
call that a barker
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i love the comment section
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You have a grandmother’s Facebook FYP
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I don’t think it’s very odd to be out
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i mean yes but no
the mortgages were being sold as investments ergo people selling those investments needs more mortgages ergo they did poor due diligence or none at all. iirc some lenders were doing shit with 0 USD down
that plus the credit agencies all going “yep these are all AAA level safe”
means slowly and slowly more and more toxic mortgages get put into those investments and when the borrowers begin to default (quite naturally) the lenders repossess and try to put it on the market
this all happened at once which overinflated supply which sent prices cratering and as people realized “hey have 1 million on this house which is only really worth 500k” which means they’re more likely to just throw their hands up and say fuck it and default
as they default the investments which were like insurance on if people defaulted had to get paid out nobody had the money
this this turns into a spiral and then you get '08
this is my rough explanation its been a while since i sifted through the federal reports so things might be a bit fuzzy
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ash is my explanation mostly right?
you liked it so i hope so
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You typed out more or less what I was thinking about posting so I hope it’s right.
The important thing is that the blame for the '08 crash should be put almost entirely at the feet of corporate greed and toothless regulators rather than individuals who just wanted to own a home, and trusted a system to not be broken and predatory.
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Almost.
One slight correction: the investments weren’t insurance. Rather, they’d buy a bunch of mortgages from the bank, combine the monthly payments into a single bond, and sell sections of that bond.
To protect investors from the full risk of “a couple people default”, they took that bond and divided it up into tranches. For example, let’s say that you expect $100 million in mortgage payments. The first $40 million received might go to holders of the senior tranche; the next $40 million might go to holders of the junior tranche; and the final $20 million might go to holders of the junk tranche.
As such, investment banks and portfolio managers in general would view the senior tranche as being extremely secure - “Surely there’ll be at least 40% of the bond that’s recovered” - and it was that tranche that was AAA-rated.
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My understanding is that insurance on the bonds is the fundamental idea behind credit default swaps? It’s the stuff that enabled some people to become extremely wealthy off the crisis (The Big Short and all that).
Admittedly a large blind spot for me, so I can’t speak on it in enormous detail.
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Good video explaining it:
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Ok, so this is not what The Big Short is about. Oops.
Time for some Googling before they revoke my in-progress degree.
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No, I was right.
Finance degree is safe.
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08 was the thing i’m pretty sure broke my immediate family so i am perversely interested in it lol
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İs this an user id wIKcXTtPgBqnSkZdTMCzy4
Nvm
if you couldn’t correctly place a finance movie I would be convinced you were replaced by a skinwalker. It’s finance, and a movie.
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