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White Collar Crime - The Impact Part 6

Part 1, Part 2, Part 3, Part 4, Part 5

Has your mortgage been securitised? MSC

Margin call another good piece of work showing the inner workings of an investment firm during a 24 Hour period of the financial crash gives us an insight as to how these financial disaster scenarios play out.

What it doesnt show directly is that the impact of the housing market crash indirectly impacts pension schemes and bonds that support these schemes as no one knows exactly what is within them.

A mortgage backed security contains thousands or hundreds of thousands of loans but each is only identified by its loan agreement number, no mention of risk.

This is the Ratings Agency job. See Part 5 S&P Big Short Video.

Each MBS can be sold on many times over and what it represents can be lost in the thread of sales. The audit trail transparency is weak.

The Banks insure them selves against this loss should the housing market fail.

They get a positive outcome at 10:1 or 20:1 in their favour.

Watch the grilling of an investment Bank at the hands of Chair Mr Levin in the investigation following the US crash.

The LaLa Land of Investing or Gambling? Rigged outcomes that are insured against through Credit Default Swaps CDS by banks.

This makes the system open to abuse who know how it really works and are in positions of power.

Is your mortgage Securitised? MSC

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