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Leverage Ratios Are Exploding, Right?
In the late nineties and middle two thousands, you have the massive creation of mortgage bonds. You have private label a b s securities that are being treated as if they're the same as us. Treasuries. And again, everybody's trying to reach his much leverage as they possibly can. As long as this collateral is maintained at the same, or very nearly the same as the highest quality collateral, nothing seems to go wrong. The only thing you should keep in mind is weu're talking about collato, repo, all this stuff. Where does the federal reserve get involved? How does the fed fix something like that? Because that's not what the fed actually does.