I’m Gonna Be Rich
December 6th, 2010
You can collect sub-prime mortgages with of a relatively low B-rating and tranche them creating a AAA bond. Banks cannot purchase B rated securities but they can purchase AAA bonds. What does this mean? Banks are essentially purchasing debt, the possibility of these sub-prime mortgages being returned is extremely low. But my grasp of the economic crisis isn’t quite complete enough to write an entire post about that. Instead it’s the principle behind it that piqued my interested, intangible assets assigned value based on presumed worth. That and a news article claiming a woman now owns the Sun (what?). So how are these related? Well if you’re an individual it is possible to claim ownership of a celestial body and it just so happens I have my eye on the meteor Eros. It’s a reasonably sizeable rock but it just so happens to have $20 trillion in precious metals in it (actually so do most meteors). So by claiming ownership of said meteor I would in theory become worth $20 trillion, wouldn’t I? I mean there was about the same percent chance those mortgages would get paid back as there is me actually getting to Eros and collecting my minerals.