Many holding companies are stubbornly avoiding short sales at least in some areas. I wonder what ties some of them might have to local governments.
I think that there is some sort of bail-out or insurance for the banks by the Fed government.
The subprime mortgage problem from 2008 is brought up well in this comdedy bit, beginning at about the three minute mark.
Bundling the debts and sell them.
“Why do they buy these investments?”
“Well, they have good names. Bear Stearns’s calls one of them High-Grade Structured Enhanced Credit Fund”
“Well, High Grade - I like the sound of that name!”
“But if these investments collapse, won’t it hurt the economy.”
“Oh - but they won’t collapse, as the government will step in and bail out the investment companies.”
https://www.youtube.com/watch?v=mzJmTCYmo9g
Yep, does not make sense.
What’s behind the scenes?