You Said What???
That is the answer I got from numerous developers I have spoken to about creating the platform
Speaking to 15 plus developers = Not all conversations are equal
They either said...
Yet, last weekend the Financial Times reported that in the first quarter of 2018 a total of $1.3 billion of bonds backed by sub-prime loans were purchased by investors.
The problem was that the perennially short-of-money King Charles II didn’t have the funds required.
Strutting their financial muscles, they claimed that they had already extended the king enough credit via the collateralized treasury orders (CTOs) they held.
These instruments were not dissimilar from modern day mortgage backed securities (MBS) and the impetus for the lesson in financial history.
Under CTOs, anticipated tax revenues were used as collateral for loan or advances.
Think of mortgage backed securities, except that instead of mortgage payments by homeowners backing the loan, it was property tax payments and the like.
To make a long story short, King Charles II defaulted on the collateralized treasury obligations.
On January 2nd 1672 they proclaimed that the tax revenues that had been promised or assigned to the holders of these securities would instead be redirected to pay other required expenses, such as outfitting the mentioned 60 ships.
The amount of debt on which England defaulted was approximately one year’s worth of government tax revenues, which at the time was slightly over £1 million.
But at its core, this is yet another great example of what happens in the market for securitization.