Category: American Debt Crisis

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monopoly

The Subprime Mortgage Crisis

Alright, before I begin, I’d like to make the following observations: Some of the concepts/instruments I am going to mention have been explained more fully in a number of previous posts: Mortgages (see here) Mortgage-Backed Securities (MBS) (see here) Collateralised Debt Obligations (CDO) (see here) Ratings Agencies (see here) The content is based on a […]

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monopoly1

Collateralised Debt Obligations. Robligations?

So, in my last article post on this topic, I talked about Mortgage-Backed Securities AKA Collateralised Mortgage Obligations (click here). The key points: A bank/mortgage-lender builds a pool of mortgages. It repackages the cash-flows that it will receive from the mortgage pool, and sells them to investors as Mortgage-Backed Securities (MBSs). The MBSs are split […]

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monopoly2

What is: A Mortgage-Backed Security

My last post was on mortgages, and focused on the home-owner (see here). If you’ll recall: The Home-Owner has a mortgage liability, which is the obligation to pay back the instalments over the mortgage term; and The Bank has a mortgage asset, which is the right to receive instalments over the mortgage term. Now this […]

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mortgage

What is: A Mortgage

Given the recent news around the US Housing Market and the Freddie Mac, I thought that I should start tackling the Subprime Mortgage crisis, the Debt Ceiling Crisis, the America-in-General crisis, and all the fun stuff that goes with it. But before I can get to that, I think I may have to back-track a […]

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inflatation tax

Inflation: Yes, It’s a Tax

It's a tax on cash.

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