Sub-Prime Mortgage Explanation - SIV (Structured Investment Vehicle)

[Marc]

Sub-Prime Mortgage Explanation by The Long Johns - The Last Laugh - George Parr

I remember a few years ago mortgages were being advertised in terms of interest-only ARMs (Adjustable Rate Mortgages). I remember reading about them and thinking that people wouldn't be able to make the payments on them when the payments ballooned simply because not everybody on the planet was going to be making way more money in just a few years (and, of course, the additional notion that not all people with ARMs would be able to flip). But not all ARM buyers had bad credit. Plenty of the ARMs were to people with decent credit who were simply buying far above their (respectable, in many cases) means. I wondered at the time who would 'fall' for such a scam, it seemed so obviously 'loaded'. And now I see the whole thing has been reframed as a "subprime" problem rather than one of the mortgage structures more generally. Now comes the bailouts....

Anyway, I saw this and it's really, really funny. So, I figured I'd post it for your humorous pleasure.