The mortgages didn't have positive value, but they had the actual homes as collateral which provided intrinsic value. A mortgage goes under and you have a house to short sell and recoup your losses. A cryptocurrency goes bust and you have nothing. It is the difference between losing 20% of your investment and losing 100% of your investment.
They literally threw the country into a recession? Also, the average person isn't writing mortgages.
A better example might be the average investor in a company.
The average investor loses everything if a company goes under. Some creditors might get paid, and if they're lucky some 'preferred stock' holders might get something. But the average person (common stock) loses everything they put in..
I'm not really seeing much of a difference ? There is risk in everything...If you can't afford to lose, then don't bet?
>I'm not really seeing much of a difference ? There is risk in everything...If you can't afford to lose, then don't bet?
The difference is that intrinsic value provides a floor for potential losses and therefore reduces risk. If you can't understand why a worst case scenario of losing 20% of your investment is better than a worst case scenario of losing 100% of your investment, then I don't think you and I are going to have any constructive discussions about investing.
