One of the feats of modern finance has been to turn hard assets, such as real estate, into financial ones. This would have been impossible without the use of complex modelling. However, the whole concept is now under pressure, and not just because of the mistakes made in securitizing mortgage loan pools and resecuritizing residential mortgage-backed securities into collateralized debt obligations.
Part of the beauty of this system was that because these securities were afforded high credit ratings, they were tradable and therefore relatively liquid.
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