Tag Archives: assets

UPDATED NEW QUOTE BY ULDIS SPROGIS 1037!!!

fotorcreated

If you liked this evergreen truth blog then read more of them, about 4100 so far, or read one or more of my evergreen truth books, especially EVERGREEN TRUTH, rays of truth in a human world filled with myths and deceptions.

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THE TRUTH ABOUT COLLATERALISED DEBT OBLIGATIONS+

cdos

Banks and other financial institutions give loans secured by a tangible asset or collateral such as a home or car. This is a collateralised debt obligation CDO. They then sell that security or loan to other financial institutions.

Everything is fine until the loan becomes very risky with high interest rates, overvalued assets, and given in great volume resulting potentially in massive defaults when the loans can’t be paid back.

The subprime mortgage lending frenzy to bad credit risks led to such high interest overvalued risky lending and when the loans could not be paid back during a financial setback many huge financial institutions were left holding the overvalued assets which triggered massive defaults causing a liquidity crisis for them and ultimately caused the financial depression in 2008 because other risky loans also started to default in huge amounts for other financial institutions.

If you liked this evergreen truth blog then read more of them, about 1300 so far, or read one or more of my evergreen truth books, especially COMMON SENSE, rays of truth in a human world filled with myths and deceptions.

For a complete readily accessible list of blogs and titles go to twitter.com/uldissprogis.

Enjoy!!!!!!

If you enjoyed this blog then here is a list of my most popular ones which you may also enjoy!!!

https://uldissprogis.com/zlist-of-my-most-popular-blogs/