How credit cards become asset-backed bonds

December 29th, 2009 | by bonds |
marketplacevideos asked:


Mortgages arent the only financial instruments that get turned into securities. Marketplace Senior Editor Paddy Hirsch explains how companies make money by buying credit card debt and bundling it. More coverage of the financial crisis is at marketplace.org/financialcrisis

LEVI

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  1. 9 Responses to “How credit cards become asset-backed bonds”

  2. By noisyclass on Jan 1, 2010 | Reply

    VERN

    thank you for posting your videos. there are a lot of information that is clear and easy to understand.

  3. By jcng5 on Jan 1, 2010 | Reply

    JAMAR

    how do the ABS handle the differing maturity(repayment)of the loan?

  4. By negkreyol21 on Jan 1, 2010 | Reply

    OTHA

    so people out there are making money off my debt wow they find every loopholes to pinch a penny opportunistics parasites

  5. By pnollen on Jan 2, 2010 | Reply

    STANLEY

    I think it’s comical that when he’s finished lecturing, he then tosses his marker.

    So this is why citibank failed. It makes sense.

  6. By provenzano99 on Jan 4, 2010 | Reply

    SHON

    Thanks! You are the first person able to make me understand how the system works. The pyramid of glasses is a very effective example!!!!
    Your english is clear and understandable!! Thanks again! Provenzano99

  7. By rfvo on Jan 4, 2010 | Reply

    JOSPEH

    I recon the bottle needs a good shake.

  8. By 4boston86 on Jan 5, 2010 | Reply

    JEAN

    This video he is not for nor aginst credit cards and the debt they place on socity with intrest. He is mearly explaining how companies change cc debt into something that can be traded backed by collateral. Which is what really happens in the market everyday. Dont change the subject. Credit cards, loans, and debt exist. It is a way of life we have created and may have to pay for in the short future but the more the public knows about how the economy works the less “in need of a drink” we will be.

  9. By captcaveman4201 on Jan 8, 2010 | Reply

    LEN

    does this system sound at all equal or fair? ask the question.. WHY SOULD THE PEOPLE WITH THE LEAST AMOUNT OF MONEY HAVE TO PAY MORE? because that is essentually what the credit score does. it is nothing less then modern day slavery. and that my friends is the ROOT cause of the mess that we find ourselves in today. this is about treating people differently. it is a system that is doomed to fail. and it wont make 1 bit of difference how much made up cash they toss at it. humpty dumpty is done

  10. By captcaveman4201 on Jan 9, 2010 | Reply

    TERRENCE

    there is a deep and serious flaw in that way of thinking. and im going to tell you what it is.. in order for people to HAVE to use the credit cards to begin with. you have to make sure that they don’t have enough money to begin with. and when they cant pay the bill because there is now an intrest added to it. what it boils down to is the people that create the money and get thier hands on it first use it to keep themselves in positions of power. and to charge people without money more for goods.

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