Credit Quote by Michael Lewis
““When Steve Eisman stumbled into this new, rapidly growing industry of specialty finance, the mortgage bond was about to be put to a new use: making loans that did not qualify for government guarantees. The purpose was to extend credit to less and less creditworthy homeowners, not so that they might buy a house but so that they could cash out whatever equity they had in the house they already owned.””
About This Quote
Source Book: “The Big Short”, 2010
Specialty finance repurposed mortgage bonds to profit from risky loans, shifting risk to homeowners.
In simple terms: Finance created new risky loan market.
Key Takeaway
Understand hidden risks in financial products.
Themes
finance
risk
mortgage
Mood
critical
informative
Type
analysis
explanatory
When to use this quote
- investment decisions
- home buying
- regulatory review
Key Concepts
economics
ethical finance
Questions to Reflect On
- What safeguards could prevent such exploitation?
- How does profit motive affect ethical decisions?
A Different Perspective
Complex financial structures can obscure true risk for investors.
![“Crucial decisions are made, today as thousands of years ago, in terms of the intuitive guesses and preferences of a few men in positions of authority...[it is] quite likely that the fate of entire societies may be sealed by a series of avoidable mistakes committed by their leaders.” quote by Michael Lewis](https://sms4smile.com/quotes/img-quotes/a59/michael-lewis-705_decision-making_crucial-decisions-are-made-today-as-thou_16888.jpg)
