A great episode of the NPR radio program this American life today already listened. Really excellent. The show was about life and death of a mortgage backed securities (MBS), the year the harmless nickname "Toxie."A group of planet money reporter bundled basically supports their money to buy a bond of mortgage debt. This is the same kind of investment, which caused the financial crisis of 2008 and the global recession that followed.
5 Reporter contributed $200, and bought the mortgage bond for $1,000. While the housing boom was, that same bond amounting to approximately $75,000! The investment-essentially a bunch of great erstellten-- paper of lawyers actually doing OK for a while, produced a stream of income in the form of a monthly examination. Dry eventually, but the monthly checks out, and the MBS dies. Total return investing $449.06, so that the MBS ends losing $550.94. Each of the five Reporter gets back $89.80 from contributing $ 200. ugly!
The reporter decide what they have left to invest in a gold coin. Much smarter when you consider how gold has done since 2008. Moreover, the Fed just announced, a new round of quantitative easing: buy printing new money from the air to government bonds. These purchases are, among other things, the dollar, weaknesses and are very likely to gold's rise.
Read more about this episode of this American life, and download the free MP3 files, visit this link. There is also a fascinating interactive timeline. Recommended!
Toxie dead from Enkhtulga on Vimeo.
Here is a cartoon, which we for NPR's show, planet money made. It comes to Toxie, a personalized toxic asset, which, contributed burst real estate bubble. Enjoy!
Labels: Financial_crisis, mortgages, mortgage Backed_securities, Strategic_default, This_American_Life
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