In 2005 #MichaelBurry discovered that #CreditDefaultSwap,CDSs, a bond market instrument, had been used to shift default risk of subprime mortgages inappropriately
Another questioned product was #MortgageBackedSecurities
-MBS -
Event insurance bizz is different from lending business
Why? Imagine a Co. that insures damages to 3rd parties due to breakage of plumbing installations
If every insured pays and it is also difficult for every insured installation to break at same time,money is earned.