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The loans are backed by assets. They will be seized if the loans were not paid back.
by ww520 7y ago
The loans are backed by assets. They will be seized if the loans were not paid back.
- Red_Leaves_Flyy 7y agoWho pays if those assets are fraudulently overvalued rubbish?
- quickthrowman 7y agoThey aren’t, they’re US Treasuries and US Agency Debt. There are no toxic assets used for collateral in the repo market.
- Red_Leaves_Flyy 7y agoLooking at yesterday, there were mortgages used as collateral. https://apps.newyorkfed.org/markets/autorates/tomo-results-display https://apps.newyorkfed.org/markets/autorates/tomo-results-d...
- quickthrowman 7y agoThat’s Agency Debt, which I specifically stated can be used as collateral for a repo loan.
- Red_Leaves_Flyy 7y agoAnd if that mortgage debt is overvalued rubbish who pays? I'm trying to avoid pedantic arguments and focus our discussion on the safeties and how effective they can be when the unthinkable happens.