Replies

To: Toddsterpatriot

The problem, as I understand it, is that people have borrowed money on these assumed values. A whole lot of debt that has nothing underneath it.

12 posted on 03/22/2015 9:05:27 PM PDT by Jonty30 (What Islam and secularism have in common is that they are both death cults)

The problem, as I understand it, is that people have borrowed money on these assumed values.

People have borrowed money on derivatives contracts?

Who would lend based on that?

You have any backup for that claim?

19 posted on 03/22/2015 9:28:28 PM PDT by Toddsterpatriot (Science is hard. Harder if you're stupid.)

The problem, as I understand it, is that people have borrowed money on these assumed values. A whole lot of debt that has nothing underneath it.

I think the term you are seeking is rehypothecation. A single physical asset hypothetically is the collateral behind one loan, but in practice (re-hypothecation) becomes the collateral for 2 or more loans. Only one of the loans really has valid collateral. If ANY of them fails, the fraudulent practice is exposed. The rest of the loans are unsecured. This practice is apparently very common in the real estate and financial circles. A house of cards waiting to collapse.

36 posted on 03/22/2015 10:42:07 PM PDT by Myrddin

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