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longship

(40,416 posts)

2. However, the CDSs and synthetic CDOs were the raw material.

Reply to marmar (Original post)

Tue Jan 5, 2016, 12:55 PM

Jan 2016

What's important is how they did it, not just that they did it. Therein lies any chance for regulation.

As Steve Eisman is quoted in The Big Short,

"They weren't satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn't afford," said Eisman. "They were creating them out of whole cloth. One hundred times over! That's why the losses in the financial system are so much greater than just the subprime loans. That's when I realized they needed us to keep the machine running. I was like, This is allowed?"

R&K

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Jon Schwarz: I Was Wrong: Big Banks Actually Were Exactly Like Counterfeiters [View all] marmar Jan 2016 OP

They not only sold paper they knew was worthless, then demanded payment in full hobbit709 Jan 2016 #1

However, the CDSs and synthetic CDOs were the raw material. longship Jan 2016 #2