| ▲ | toomuchtodo 4 hours ago | |
Ehh, tell me the credit ratings assigned by rating agencies to mortgage backed securities circa 2005-2007. Its an ecosystem with misaligned incentives, and some cohort of investor will be left holding the bag. Big Tech, investment banks, and ratings agencies will get off with no consequences when this Jenga-esq capital apparatus eventually collapses. | ||
| ▲ | lazide a few seconds ago | parent | next [-] | |
Except for a few instances, there wasn’t any lying or outright fraud in that situation, just like there probably isn’t here either. Just desperate, stupid, or naive lenders trying to get solid returns (and convincing themselves there are no major risk). Just like ‘08, frankly. Have enough lawyers, and you can make almost anything legal and aboveboard, no matter how sketchy it actually is. Buyer beware! | ||
| ▲ | robocat 4 hours ago | parent | prev | next [-] | |
A nice article on the underlying systemic causes of the crash: https://archive.ph/2015.11.08-145615/http://www.wired.com/20... | ||
| ▲ | SpicyLemonZest 4 hours ago | parent | prev [-] | |
I don't see what's Jenga-esque about this capital structure. You've got some AA- bonds issued directly by Meta having to do with their core business, and some A+ bonds issued by different entities to fund their riskier and more speculative datacenter construction. If anything, wouldn't it be harder to track the risk if both these bonds were stuffed into the same bucket? | ||