Skip to main content

View Diary: Can someone explain to me why? (46 comments)

Comment Preferences

  •  I am well aware of leveraging of financial (3+ / 0-)
    Recommended by:
    Shirl In Idaho, Steve Love, Conure

    institutions and how they operate.

    But, i don't think of financial institutions are businesses. Never thought of them as one actually. I don't know why.

    Whoever buys a mortgage then another one, then packages it together and sells it to an institution and then that institutions gets a credit line that leverages 10 times the value of those mortgages to again go back in the market and buy more mortgages, to me, is not producing anything. Thus, it is not a business.

    PS: I was reading a small article on FT last night that says that the mortgages of a small town on the coast of Florida were leveraged about 31 times. That means if you bought a house that is worth $1000, the guy who bought that mortgage sold it for $31000. And some banks in Europe bought that package.

    Don't give a damn a/t each & every politician currently alive in the US. Last time i voted for the top part of the ballot was 1972. Never missed SB election

    by Mutual Assured Destruction on Fri Feb 13, 2009 at 09:33:15 AM PST

    [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site