[hinkley]

Having flashbacks of The Big Short.

[bdndndndbve]

The problem in The Big Short was that lenders bundled many loans with correlated risk and advertised the resulting bundle as less risky. Because of the demand for these bundles they issued and bundled increasingly risky loans as time went on. Eventually when the market corrected all of these loans defaulted at the same time.

[wbl]

Ever since the first copper merchant took inventory risk senior and junior tranches have existed.

[mattmaroon]

I this case it’s just one company that everybody knew was risky going in at least.