Let's say Armageddon did occur, and CMOs and CDOs all collapsed in a mighty crash.
The insurers' stock performance suffers because they also write policies for those much-maligned CMOs and CDOs.
In some cases downgrades of assets that back CDOs have gutted the securities' value.
CDOs are pools of loans and other assets, cut into slices with different risks.
But, somehow, I found it difficult to fit synthetic CDOs into my good-guy basket.
Merrill Lynch, Citigroup and UBS were the top three underwriters of structured finance CDOs last year.
But mortgages, the bonds made up of securitised mortgages (those CDOs), were very rarely traded.
CDOs that working with the banks and funds that structure them has proved irresistible.
ECONOMIST: Not all triple-A ratings inspire total confidence
CDOs backed by assets such as mortgages and issued over the past two years.
CDOs, and the rating agencies that gave them their initial high ratings, are feeling defensive.
The value of subprime CDOs has tumbled because the mortgages are defaulting at ever-higher rates.
CDOs, or sold guarantees to enhance the rating of the senior tranches, have had a rude shock.
Many CDOs earn salaries equivalent to other senior roles like chief marketing officer or chief legal counsel.
Traditionally CDOs buy assets at par and use the cash flows to pay debt and equity investors.
CDOs were at the centre of the 2008 financial crisis which rocked Wall Street and global markets.
The fund, which invested in collateralized debt obligations (CDOs), later failed and investors lost much of their investment.
For the past year, Shilling has followed his own advice and made a 600% return on BBB-rated CDOs.
Second, the Federal Reserve Bank of New York purchased the CDOs directly from Goldman and the other banks.
The value of subprime CDOs has dropped sharply this year because the mortgages are defaulting at ever-higher rates.
CDOs are being used to transform existing debt instruments that are accurately priced into new ones that are overvalued.
He believes some of the confusion stems from the haste with which CDOs were slapped together during the boom.
CDOs bind together the fate of assets that have few real economic links.
CDOs, despite the admission that American Express did not fully comprehend the risk.
ECONOMIST: ��Structured finance�� can bring unstructured losses
CDOs a useful way to get the higher yields on semi-louche corporate bonds while respecting requirements to hold investment-grade paper.
CDOs offer higher yields than similarly rated mortgage-backed bonds, but are more susceptible to losses if the underlying loans decay.
Their ratings enabled the investment banks which put the CDOs together to then sell them to investors around the world.
BBC: Standard & Poor's expects lawsuit over subprime ratings
CDOs have, since 1998, often been unable to sell the bottom tranche, forcing them to hold on to it themselves.
ECONOMIST: ��Structured finance�� can bring unstructured losses
So that gave financial whizzkids a motive to create complex securities like collateralised debt obligations (CDOs) based on subprime mortgages.
ECONOMIST: The unintended consequences of past financial reforms
Many CDOs are backed by subprime loans and other toxic waste and are divided for investors into senior and junior tranches.
Just imagine, go on, just imagine, that all of these securitised mortgages, the CDOs, had all ended up with final investors.
应用推荐