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by mullingitover
1196 days ago
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> In the 2008 crisis, a major lesson was that you can’t effectively reduce risk by bundling together lots of risky assets into one major asset. That was the first domino to fall, but that was survivable. The real problem was that the banking system had a suicide pact in the form of credit default swaps on each other that they couldn't cover. The MBS stuff was bad, but that wasn't what caused 2008. Now I'm just waiting to find out if some other bank is going to need to pay out credit default swaps for SVB in excess of their market cap... |
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