A term that emerged with the subprime crisis in 2007 to describe seemingly highly creditworthy issues – even those of top addresses, i.e. not dingo securities of dubious issuers or even financial vultures – that are, however, basically worthless. – In 2006, for example, the globally respected investment house Goldman Sachs (GS), headquartered in New York, tranched a pool in which 8,274 home loans, mostly in California, were bundled. This portfolio was originally valued at $494 million. As it later turned out, there was just $0.71 million in equity behind the securitized home loans. Auditors also uncovered that nearly sixty percent of the borrowers had no income verification at all or had been grossly negligent: they were clearly ninja loans. – See asset-backed securities, default loss, bad bank, balloon loan, cheap copy, blue-sky laws, loan, non-standard, financial crisis, Financial Market Stabilization Act, Hypo Real Estate bailout, IndyMac bankruptcy, jingle mail, credit, non-recourse, lending rule, collateral crisis, liquidity pool, Northern Rock debacle, originate-to-distribute strategy, panic selling, paper, toxic, blowback effect, subprime crisis, subprime lending, submarine effect, securitization, traditional, securitization structure, confidence bubble, lemon trading, special purpose vehicle, twenty-two credit.
Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/