Re:Do You Know Who Owns Your Debt?
by throwaway35784 on Sunday November 17, 2019 @07:00PM
(#21560915)
Layers of understanding. That's what we are talking about. How many Layers must be understood to know something is broken? Or what's broke about it?
It's broke. I know that. I don't think continuing down a broken path is gonna fix it.
Re:Do You Know Who Owns Your Debt?
by lazypenguin on Saturday November 16, 2019 @10:27PM
(#21556385)
I traded CMO derivatives for several years at a broker dealer that specialized in MBS and other fixed income products. I’m intimately familiar with the system and stand by my analogy.
I work as a derivative quant/trader in EM (mostly fx swaps and such) and think that the broker-dealers I transact with provide value. Otherwise, obviously, I wouldn’t need them! This may be a little controversial, but in most cases, being paid means you provide value. And when this isn’t true, it almost always has to do with government regulation.
Anyways, while I don’t have any experience with MBSs, you were probably providing value even if you didn’t think so.
Using the example of mortgage backed securities, they were created to solve real problems. Mortgages carried risk, were too unique. Also money had a hard time reaching those who needed mortgages. Most mortgage providers were local and often there were too many people who wanted mortgages and not enough money, or the other way around. By packaging mortgages together, you could reduce risk and sell traunches nationwide.
TLDR: understanding is a prerequisite of change. And just like software, if you can’t find a reason for why something exists you should probably look harder. More likely than not, you are the one who doesn’t understand, not the person who created the thing in the first place.