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As I originally heard it the Fed or HUD(?) started moving towards guaranteeing subprime mortgages, and the AAA rating idea took off from that. The Fed issues b
by kwillets 8y ago
As I originally heard it the Fed or HUD(?) started moving towards guaranteeing subprime mortgages, and the AAA rating idea took off from that. The Fed issues bonds that are risk-free, so brokers extrapolated government buying of a few subprime mortgages to low risk for all of them.