Betting on Failure: Profiting from Defaults on Subprime Mortgages Harvard Case Solution & Analysis

In October 2008, in the midst of a fiscal catastrophe, Anthony Keating, Blaylock investment manager at the Boston private bank Billingsley, and Montgomery, was investigating an investment strategy to advocate to his high-net-worth customers. Traditional investments in the equity markets were being destroyed, and Keating's clients would be concerning him for ideas. Inspired by the success of Paulson and Co., Keating began to contemplate the possibility of entering a trade that would benefit as homeowners defaulted on their mortgages.

The more Keating understood that he needed to know about credit default swaps and mortgage-backed securities, the more he learned about the commerce. The instance provides teachers using an opportunity to introduce these financial instruments while providing lessons appropriate to pupils interested in real estate finance or value investing.

PUBLICATION DATE: January 05, 2015 PRODUCT #: KEL879-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING

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