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You know, at the beginning of this year, as kind of an experiment, our Planet Money team purchased a toxic asset - you know, one of those complicated mortgage bonds that ended up triggering the global recession. Listeners named NPR's asset Toxie. In the beginning, people loved her. She was at the center of a housing boom. But our reporters have been asking why nobody realized that she would turn up toxic. Maybe they'll also explain why they call her a she. Here are David Kestenbaum and Chana Joffe-Walt.

CHANA JOFFE-WALT: Toxie was born in 2005. And we found someone who was present at her creation: Lisa Liberator-Kinney.

DAVID KESTENBAUM: She's not a banker; she lives in Florida. And in 2005, Lisa and her husband were looking for a home. And all the open houses they went to were totally mobbed.

Ms. LISA LIBERATOR-KINNEY: We kept thinking is - we just need to find a home. How do we find a home? It was getting very frustrating. We would just drive around and, you know, hope you could just find something.

JOFFE-WALT: They eventually found a place, got a mortgage loan from a local bank. And like many mortgage loans, it got sold to Wall Street - thrown into a pile with thousands of other mortgages and put into a bond. That bond? Its the one we bought.

KESTENBAUM: Lisa is one of the homeowners whose mortgage is in Toxie. Now, did she spot the housing bubble? Well, it didnt feel like one.

Ms. LIBERATOR-KINNEY: I don't know that you can ever tell. How do you spot it, you know?

KESTENBAUM: How weird would it be to like get in a time machine and go back? You would feel like everyone was on some sort of strange drug.

MS. LIBERATOR-KINNEY: Yeah, I think so. And you know, I could probably shout at the top of my lungs of what was to come, and I dont think anyone would have paid any attention.

JOFFE-WALT: At the time, Tony Polito was paying a lot of attention. He works for a housing market research firm in Tampa, Florida, called Metro Study.

KESTENBAUM: His colleagues would go out and look at new houses. Okay, this one sold, but is there a car in the driveway? Did someone really move in? A lot of the time, the answer was no. The homes had been bought by investors.

MR. POLITO: It could be an executive at a power company. It could be a dishwasher at a restaurant. All of them were out trying to buy homes, just to buy them, flip them, make some money and move on.

JOFFE-WALT: Those homes were empty in 2005. And theyre empty now.

MR. POLITO: It's, quite honestly, a little scary. Theyre overgrown. Down in Fort Myers, they had all kinds of big, large lizards living in these homes.

JOFFE-WALT: So you might think that Tony Polito and the folks at Metro Study saw this huge housing bubble forming. But they didn't, either, because there were explanations for the rising housing prices, for all those investors.

KESTENBAUM: Actually, just one important explanation: Toxie. Mortgage bonds like Toxie were an ingenious way of connecting places with money to lend -pension funds, insurance funds and banks - with people who wanted to borrow to buy a home.

JOFFE-WALT: In 2005, over a trillion dollars' worth of bonds like Toxie were being created - an ocean of money flowing into the housing market. So more crowds at open houses and rising prices.

KESTENBAUM: But then Tony Polito showed us something really chilling.

MR. POLITO: This is just an aerial photograph of one area of Charlotte County.

JOFFE-WALT: This is a different kind of warning sign. You didnt need to crunch historical home price numbers to see it. All you needed to do was to drive a couple neighborhoods over.

KESTENBAUM: The aerial photo shows miles of windy suburban roads, like a housing development - except no houses, just the roads. And this is not the wreckage of the 2005 bubble. This is from 40 years ago.

MR. POLITO: These were lots that were put in, in the 1970s. Part of that fly and buy, buy land cheap in Florida.

KESTENBAUM: So this isnt the first time this kind of thing has happened in Florida

MR. POLITO: Yeah.

KESTENBAUM: Weird to take a grid for the suburb, but there are no houses put on it. Avocado Drive, Egret Court...

MR. POLITO: Actually, some of these streets have been there so long you can see trees growing up in the roads. And that's why there is a 100-plus year's supply of lots in Charlotte County.

KESTENBAUM: That's so weird...

JOFFE-WALT: A hundred-plus years' supply?

MR. POLITO: Yes. In fact, it's probably over that now. It became hard to calculate it on my fingers and toes.

KESTENBAUM: Why are we so bad at spotting bubbles?

JOFFE-WALT: That feels like a particularly relevant question now that Toxie is nearing the end of her life.

Lisa-Liberator Kinney and her husband, whose mortgage is in Toxie, they're still making payments.

KESTENBAUM: But a lot of people are not. And very soon, our bond will be worth nothing.

JOFFE-WALT: Were told she only has days left to live.

KESTENBAUM: Im David Kestenbaum.

JOFFE-WALT: And Im Chana Joffe-Walt, NPR News.

INSKEEP: And you can follow the progress - if thats the word for it - of our toxic asset investment, Toxie, at NPR.org.

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