muses of the moment

April 10, 2013


George Washington via wrote a great piece on MERS and how it contributed to the Mortgage Crisis and the following global credit freeze. It is an excellent description of mortgage securities and the magic of AAA rating.

Click here.

I bring this up because the mortgage crisis is not behind us. These securities have not been unwound yet, no losses really booked yet AND new ones are still being created and sold. This crisis, or actually the second half of the original mortgage security/derivative crisis, should hit around October 2015 (Martin’s date for his Economic Model Cycle).

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