Correlated mortgage defaults can take down the system. Created by securitisation: many household risks bundled and resold become one society-sized risk.
This is a need. Something a person cannot ignore. Non-negotiable, usually urgent, and the most reliable foundation for a business. It is felt by the society, continuously, and rates 5 out of 5 for the pressure it exerts.
It is rooted in Safety.
This friction did not arise on its own. It was created by Mortgage-backed securities — a solution to an earlier problem that produced this one.
The market has answered it in 1 ways: Bank capital and mortgage regulation
Its neighbourhood
Everything this entry connects to directly. Click any point to follow it.
The line back to a human being
5 hops from a person at a phase of life. The further a thing sits from the person, the more abstract it looks — and the more it tends to be mistaken for something that came from nowhere.
- FrictionCorrelated mortgage defaults can take down the system
- SolutionMortgage-backed securities
- FrictionBorrower may not repay
- SolutionMortgage
- FrictionNeed a shared home before you can afford to own one
- Life phaseHousehold formation
- Rooted inSafety
- Rooted inScarce resources
- Rooted inShelter
- Rooted inUncertainty
Relieved by
Every one of these is a business, an institution or a habit built on this single pressure.