The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans.
In "The Big Short," Michael Lewis highlights how the development of the mortgage bond market revolutionized Wall Street's operations by allowing it to engage with the financial obligations of everyday Americans. This shift marked a significant departure from traditional practices, as Wall Street began to invest in and profit from the home loans of average citizens.
This connection between Wall Street and individual mortgages paved the way for a new financial landscape, where the risks associated with these debts became complex instruments for trading. The book underscores the implications of this transformation, illustrating how it contributed to the broader economic issues leading up to the financial crisis.