After years in the post-Lehman doldrums, the finance markets are springing back to life. Legal Business assesses the forces powering the upgraded ‘Doomsday machine’
‘Having gathered 100 different [sub-prime-backed bonds], they persuaded the ratings agencies that these weren’t, as they might appear, all exactly the same things. They were another diversified portfolio of assets! This was absurd. The 100 different buildings occupied the same flood plain; in the event of a flood, the ground floors of all of them were equally exposed… The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street, it was a machine that turned lead into gold.’
Michael Lewis, The Big Short
Subscriber Access
You must be logged in to view full premium content.
