This doesn’t *feel* like something that didn’t exist previously now exists, but manufacturing happened regardless. The genius of securitization, and it is genius, is that it is inefficient for a manufacturer of mortgages to own all the mortgages. Toyota doesn’t own all cars.
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“Why inefficient?” Well there are people whose future needs for cash flows are shaped in such a way that they’re happier to tie up more money now in return for predictably receiving a modest rate of interest than the bank is. (Pension funds, insurance companies, etc)
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They want the mortgage more than the bank does, in same way that you want the car more than Toyota does, and so the market “should” arrange for the mortgage to move over to their books and the car to move to your garage.
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This logic is almost certain to hit SaaS companies eventually, by the way. It’s not obvious that Dropbox is the best owner of the stream of cash flows from me to Dropbox.
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(I once asked a very savvy person “Why hasn’t this happened already?” and his answer was that the boom market in SaaS equity makes securitizing SaaS payments unnecessary and potentially a bit negative.)
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“What do you mean, negative?” Well a bank is a pot of money and an operating business, right? A SaaS company is a smaller pot of money, an operating business, and a large number of probable future cash flows. You might be able to efficiently value those cash flows directly.
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But effectively the equity markets let you sell someone very attractive cash flows bundled with an operating business that maaaaaaaaybe they’re paying quite a lot of money for relative to similar software factories.
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i don't get this why it is better to own maybe money in the future
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Because you’ve promised to pay a rate of interest which (probabalisticslly speaking) covers the risk factor of non-payment, the bank’s cost in origination and servicing, their cost of funds, *and then some.*
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2) . I'm fairly anti-debt in general but I think the's just as much risk to banks loaning at 3-4% for 30 years as there is to a homeowner given some of the dynamics at play in the markets.
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We're getting mortgages with less than 0.45% rates here in Scandinavia. Think about how banks are feeling here

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