Summary: Collateral dominates structure. Silk purse. Photo: Sideshowmom. Source: Morguefile That’s a phrase I coined twenty-five years ago when I was an institutional bond investor. At that time, Mortgage Backed Securities were still pretty new. Brokers would take MBS “pools” and put a bunch of them into a single trust. Then the trust would issue its own bonds, with different bonds getting paid first, some bonds taking more prepayment risk, other bonds protected, and so on. They called […]
