There's a reason I only skim the headlines of Housing Wire. Namely: I know nothing about economics, so the details of what's happening in the subprime crisis are complete jibberish to my Bachelor of Arts brain. Here's an example of the most recent fare:
"Those differences, however, have helped make mezzanine financing into Very Big Business™, since mezzanine debt is often treated as equity by the rating agencies. And — much more importantly — modern mezzanine lenders have taken to using the CDO market to leverage their returns.
I think you can see where I’m headed with this."
Umm, nope. Anybody else?
I don't get it either. But my husband the finance geek understood it completely (yay for him!) Mezzanine is a type of bridge investment. It would be like buying real estate then selling it for a profit before it's fully funded. Does that help you? I don't know that it helped me!
ReplyDeleteThat helps... slightly...
ReplyDeleteIt works on an intellectual level, but the practicality of it still escapes my grasp. :-D
Er, I have a MS in Economics and that was gibberish to me, too. Don't feel too bad about it. Then again, I understand about thiiis much Finance. *blush*
ReplyDelete