B
Big BOB J
Guest
been trying to understand all this for a course i am doing, but sruggling in one part. brokers secured mortgage deals, subprime, and received commission for this. lenders actually went through with the deals and lent homeowners money for the mortgage. they then sold these mortgages on to investment banks who turned them into CDO and then sold them on to individual investors. is this right so far? loads defaulted then on the payments, so houses repossessed by both lenders and by investment banks, depending on who owneed the mortgage each time. supply went up, economics forced prices to go down and then they were left with worthless assets (known as toxic or not?) they then had nobody to buy these off them from then on and transfer the risk of their investment and the resp. also, they couldnt pay back federal reserve where many borrowed million billions and had high leverage. again, is this right?
if so, how do lehmans brothers fit in, are they lenders, brokers, investemnt bankers/banks. is there a case study i can look at to better understand even? an example of a lender, and an invesment banker?
also, did the banks just not recognise the risk or was it ignored?
cheers please answer all if you can
if so, how do lehmans brothers fit in, are they lenders, brokers, investemnt bankers/banks. is there a case study i can look at to better understand even? an example of a lender, and an invesment banker?
also, did the banks just not recognise the risk or was it ignored?
cheers please answer all if you can