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Do you think MBS are always and forever a bad investment because of a bubble 15 years ago? The MBS wasn't even the problem here. If they had 10Y corporate bond
by dahfizz 4y ago
Do you think MBS are always and forever a bad investment because of a bubble 15 years ago?
The MBS wasn't even the problem here. If they had 10Y corporate bonds or Treasury notes paying the same rate, they would have had the same problem.
- walrus01 4y agoTo be clear, I think MBS are morally wrong in how they're implemented in the market, yes. A bubble 15 years ago? We're in a massive housing price increase bubble now. Buying $80bn of MBS in the middle of a well-known housing price bubble is catastrophically stupid.
- dragonwriter 4y ago> Do you think MBS are always and forever a bad investment because of a bubble 15 years ago? I think heavy exposure to a single type of long-term asset for a retail bank is always going to be a bad investment decisions, because risks materialize, and correlated risks tend to materialize together, and when a retail bank suddenly lacks liquidity...