Owning Toxie the Toxic Asset

A mortgage brokerage in the US advertising subprime mortgages in July 2008.

The infamous toxic asset, widely blamed for the pre-2007 property bubble and resulting economic crash of 2008.  They were all over the news during the crash but although almost everyone knows about them and how bad they are very few people really know what they are and how they work.  Even fewer people know that you, yes you, can buy and own a toxic asset.  In an nutshell a toxic asset is a collection of pieces of bank mortgage portfolios.  Which is another way of saying they are slices of slices of peoples mortgages

In this episode of This American life from November 2010 tells the tail of a toxic asset that the Planet Money team bought and tried to unpack to get some idea of whose mortgages they had bought.  In the end their toxic asset, which they named Toxie, dies a death that only a toxic asset can die when enough mortgages in that portfolio default and the asset gets "frozen."

You can listen to this facanating episode of This American Life here.