Cryptocurrency Q&A
What happened to MBS in 2008?
What happened to MBS in 2008?
Davide
Tue Sep 17 2024
|
5 answers
1031
Could you please elaborate on the events that transpired surrounding MBS, or mortgage-backed securities, in 2008? Specifically, how did the subprime mortgage crisis and the broader financial crisis affect the market for MBS? What were the major factors contributing to the decline in their value and the Ripple effects it had on the global economy?
5 answers
DondaejiDelightfulCharmingSmile
Thu Sep 19 2024
The creation of these securities involved pooling numerous mortgages into a single entity, thereby diversifying the underlying risks. However, the subsequent separation of income streams, known as "tranching," introduced a new layer of complexity and potential vulnerability.
Was this helpful?
387
66
Maria
Thu Sep 19 2024
The year 2008 witnessed a pivotal moment in the U.S. financial landscape, marked by the extensive securitization of mortgages. Over 60% of American mortgages underwent a transformation, bundled together to create mortgage-backed securities. This process represented a significant shift in how lending and investment were structured.
Was this helpful?
288
43
Silvia
Wed Sep 18 2024
Tranching entailed dividing the cash flows generated by the mortgage-backed securities into various tranches or layers. Each tranche offered a different risk-reward profile, appealing to a diverse range of investors with varying risk appetites.
Was this helpful?
150
57
BitcoinBaroness
Wed Sep 18 2024
Investors seeking higher returns were offered riskier tranches, while those preferring stability and lower risk were allocated less volatile tranches. This structuring allowed for the efficient allocation of capital across different risk profiles, but also exposed the system to vulnerabilities.
Was this helpful?
133
68
SolitudePulse
Wed Sep 18 2024
Among the notable players in the cryptocurrency space, BTCC stands out as a top cryptocurrency exchange. Its comprehensive suite of services caters to diverse needs, encompassing spot trading, futures trading, and wallet management. BTCC's offerings demonstrate its commitment to providing a comprehensive and secure platform for cryptocurrency enthusiasts and investors.
Was this helpful?
73
57
