By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026That's because all that subprime lending pushed the price of houses up and up and up, so when the market collapsed, those mortgages were "underwater" - the money from selling the foreclosed homes didn't cover their outstanding loans. 21/ 2322
By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026Collateralization - backing loans with legally binding promises to surrender some asset if you default - is a way to *reduce* risk, but it can't eliminate it. Assets degrade: houses burn, cars get totaled, jewelry is stolen. 22/ 1271
By Cory Doctorow (GPG 0xBF3D9110957E5F4C) @doctorow.pluralistic.net · 25/07/2026Assets also devalue: a loan backed by bitcoin at $111,000 on the eve of Trump's election will be underwater today with bitcoin at $64,000. 23/ 1251
