Cryptocurrency
Out of context: Reply #460
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The Cryptocurrency Crash Is Replaying 2008 as Absurdly as Possible
Substitute dollars backed by almost nothing are taking down the market.In the lead-up to the 2008 financial crisis, the economy was running hot. Companies were making stupendous amounts of money and had to put it somewhere. There was such a huge demand for safe dollar-equivalent assets that supplies of Treasurys and other such superstable assets were running low. Financial engineers synthesized “safe” dollar-equivalent products to meet the demand—backed by assets such as real estate, or by securities backed by real estate, or by bets on securities backed by real estate. This worked until the housing market had the slightest downturn, at which point the chain of leveraged bets unwound and threatened to take the wider economy with them.