What’s the worst scenario could happen to a person?
By Daniel at 23 January, 2009, 12:30 am
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I read this from somewhere:
“I had investments in Lehman Brothers, with mortgage backed securities..which were insured by AIG, then I put my kids in ABC learning centre so I could concentrate on buying up real estate in California, using and leveraging the maximum equity in my house…and I am conservative with my equities and have shares in bluechips such as Citigroup and diversified externally with RBS, and my day to day cash was placed in Bank of America.
You may think my financial situation is ‘unfortunate’, but let me assure you we have our life savings with Madoff Investments which has seen us through the worst times.
Appreciate your concern, but I am fine, thank you. ”
Remember during the bank of crash 1991 , the wall street banksters said it could NEVER happen again, because instead of banks holding mortgages on their books, it is now sliced and dice and spread and sold all over the world. well a rotten egg is still rotten whether it whole or divided into many pieces. another analogy is like a virus, instead of the virus staying only with the banks, the virus is given to thousands of investors, so now not only the banks get sick but the investors get sick too.
see quote below.
“In a securitization, originators such as mortgage lenders sell their loans to an investment bank, which pools these loans into securities and sells them to investors. Dicing up millions of mortgages into tradeable securities was supposed to protect banks by spreading credit risk among a wider range of investors. But the complexity and magnitude of the securitization market helped turn the collapse of the U.S. subprime mortgage market into a full-blown financial crisis.”
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