Hilarious, particularly if you are a trader short yield…
The part about selling bundled mortgages to the next willing buyer is something I discussed long ago. Someone please call when they’ve figured out how to accurately price these securities, while their collateral tumbles in value.
(h/t to Marc Andreessen, via PK)
UPDATE: Hard to value the securities, but still little mention of exactly how inflated the collateral might be.
ANOTHER UPDATE: Jim Keegan says it:
“Take one example where the prospectus was 391 pages. Just think about it. You don’t even have to know anything about subprime. If it’s 391 pages, there’s a lot of risk in there, and if the loan-to-value ratio on second-lien loans was almost 100%, than you’re making a leveraged bet on real-estate values. And real estate was trading at 7 to 10 times median income.”
Yep.