What is individual securitization? Does it give more control to the individual or does it give the *appearance* of control, while actually placing the reins in other people’s (investors’?) hands?
related articles:
https://slate.com/technology/2018/11/mark-stasenko-overvalued-human-capital-market-derivatives.html
https://www.bloomberg.com/news/newsletters/2020-02-25/money-stuff-you-can-securitize-people-now
In: Economics
Securitization =
1) taking a stream of revenue (mortgage payments, credit card payments, road tolls) and making it a security, ie something that people can trade. Think a piece of paper whose owner is entitled to the payments
2) pooling them in a larger security to reduce variance (if I am entitled to the mortgage payments of 1000 houses, it’s *supposedly* not too risky: it’s unlikely that all of them will stop paying at the same time
There has been a trend towards more and more securitization in the first sense, ie what stream of future incomes can I sell. An individual could sell is future earnings for example: “give me cash now, for example to fund my education, and I’ll give a share of my income later to whomever holds this piece of paper”
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