3 ms·
Why do you think the mortgage derivatives were broadly speaking underpriced? There are a lot of kinds of risks you can buy that exhibit "picking up dimes in fr
by rlucas 9y ago
Why do you think the mortgage derivatives were broadly speaking underpriced?
There are a lot of kinds of risks you can buy that exhibit "picking up dimes in front of a steamroller" risk, and are priced fairly. That is, 99% of the time you get a free dime...
- narrator 9y agoSeems AIG was the designated bagholder and lynchpin of the whole thing. Many derivative buyers got 100 cents on the dollar on all their derivatives they bought from them because the government picked up the obligations.