豆知识 2010-11-28&12-04 图说信贷危机(2/3)

 Theinvestors see this and want a piece of the action, and this gives Wall Streetan idea. They can connect the investors 1 to the homeowners through mortgages.

Here’show it works.
A familywants a house, so they save for a downpayment, and contact the mortgage broker 2. The mortgage broker connects thefamily to a lender, who gives him a mortgage. The broker makes a nicecommission. The family buys a house and becomes homeowners. This is great forthem because housing prices have been rising practically forever. Everythingworks out nicely.
One daythe lender gets a call from an investment banker, who wants to buy themortgage. The lender sells it to him for a very nice fee. The investment bankerthen borrows millions of dollars and buys thousands more mortgages and putsthem into a nice little box. This means that every month he gets the paymentsfrom the homeowners of all the mortgages in the box. Then he seeks his bankerwizards on it to work their financial magic, which is basically cutting it intothree slices: safe, okay and risky 3. They pack the slices back up in the box andcall it a collateralized debt obligation,or CDO.
A CDOworks like three cascading 4 trays. Asmoney comes in, the top tray fills first, then spills over into the middle, andwhatever is left into the bottom. The money comes from homeowners paying offtheir mortgages. If some owners don’t pay and default on their mortgage, lessmoney comes in and the bottom tray may not get filled. This makes the bottom trayriskier, and the top tray safer. To compensate 5 for the higher risk, the bottomtree receives a higher rate of return while the top receives a lower, but stillnice return. To make the top even safer, banks will insure it for a small feecalled a credit default swap 6.
Thebanks do all of these works so the credit rating agencies will stamp the topslice as a safe triple A rated investment, the highest, safest rating there is.The okay slice is triple B, still pretty good, and they don’t bother to ratethe risky slice. Because of the triple A rating, the investment banker can sellthe safe slice to the investors who only want safe investments. He sells the okayslice to other bankers and the risky slices to hedge funds and otherrisk-takers. The investment banker makes millions. He then repays his loans. 
Finallythe investors have found a good investment for their money, much better thanthe 1% treasury 7 bills. They are so pleased they want more CDO slices. So theinvestment banker calls up the lender, wanting more mortgages. The lender callsup the broker for more homeowners. But the broker can’t find anyone. Everyonethat qualifies for a mortgage already has one. But they have an idea. 
Whenhomeowners default on their mortgage, the lender gets the house. And houses arealways increasing in value. Since they’re covered if the homeowners default,lenders can start adding risk to new mortgages: not requiring down payments, noproof of income, no documents at all. And that’s exactly what they did. Soinstead of lending to responsible homeowners, called prime mortgages, they started to get some that were, well, lessresponsible. These are sub-primemortgages.
This isthe turning point.