Post #4095175
2026-07-25 10:47 UTC
A lender who can "securitize" their loans (turn them into bonds and sell them off to investors) can insulate themselves from risk, because the people who buy the bonds are now carrying that risk.
So many of our crises come from the intersection of these two phenomena: the promise of reducing loan risks without losing the risk premium *and* the fact that risk reduction can fail suddenly (or be revealed as nothing more than risk-shifting).
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Replies (1)
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@pluralistic@mamot.fr 2026-07-25 10:47
The first phenomenon creates vast credit bubbles, the second one pops them. This leaves would-be usurers on an endless quest for new ways to lend money at a premium to poor people while reducing their own risk. You don't need technology to do this - all you need is a captive audience of broke people whom other lenders won't touch. 17/