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> They're just trying to hold on to them until the securities they sold mature. So if those were 30 years mortgages the collapse should be fairly far away?
by abdabab 4y ago
> They're just trying to hold on to them until the securities they sold mature.
So if those were 30 years mortgages the collapse should be fairly far away?
- ChicagoDave 4y agoNo. The securities aren't necessarily the length of the mortgages. Traders will offer to buy AAA tranches for 5 years or 2 years. There is no set length. A lot of times these are used to back municipal bonds which get setup for 5 to 10 years to help small cities borrow and build infrastructure. It's all intermingled and why our financial system did not learn any lessons from 2008.