The Balcony: The 1970 Mortgage Trust Report

The Balcony takes the strongest story in The Alchemy of Finance, by George Soros: chapter two's mortgage trust report of 1970. Vera: his report scripts a boom in four acts. Augie: and the trusts nearly double in a month; a Cleveland bank begged for a fresh copy because theirs was photocopied blind. Vera: then new issues flood in and prices fall; years later most go broke, and he shorts them all the way down for over one hundred percent. Verdict: keep his lesson, seeing the bust stops no boom; keep the Xerox, theories move prices.

The strongest story in The Alchemy of Finance is chapter two's mortgage trust report of February 1970: Soros published a research note scripting a boom and bust in four acts, the few existing trusts nearly doubled in a month, a Cleveland bank asked for a fresh copy because its photocopies had become illegible, a flood of new issues sent prices down almost as fast, and years later he shorted the group as most REITs went broke, selling more as they fell for a profit of more than 100 percent; the lesson he draws is that seeing a bust coming stops no boom, because a theory about prices can move them.

On the book: The Alchemy of Finance by George Soros

Starring

DotVera LindqvistAugie Castellano