In September 2005 S&P (Standard & Poor’s) issued “Who will be left holding the bag?” in what would turn out to be a prescient report about the housing market and mortgage backed securities. Around the same time certain investment banks created a new mortgage related security called a CDO (collateralized debt obligation, some were cash […]
The picture is a diagram of the US Shadow Banking System produced by the New York Fed in 2009/10. It is important to note, a handful of the largest, most sophisticated American banks, largely in the Federal Reserve district east of the Hudson created and inflated the Shadow Banking system. Layers two and three contained […]