By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026These pieces were recombined according to complex mathematical formulas that supposedly "proved" that the default risk from poor borrowers had been "offset" by combining them with other borrowers' loans and wrapping them in opaque insurance contracts. 14/ 1291
By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026Those subprime mortgages came with cheap "teaser rates" - the interest rate you paid over the first couple years - but then the interest payments "ballooned" to farcical sums that borrowers had no hope of repaying. Those farcical sums were the risk premium. 15/ 1496
By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026When financier transmuted these high-risk 30-year mortgages into complex derivatives, they were effectively promising their customers a piece of that risk premium for 28 out of the 30 years that the mortgage ran for. 16/ 1242