Skip to main content

View Diary: Scientists *Prove* Toxic Assets are Impossible to Regulate (268 comments)

Comment Preferences

  •  A CDO isn't a derivative. (0+ / 0-)

    There's a lot of illiteracy on this subject.  I think your comment is typical: a broad call to ban something that the commenter fundamentally doesn't fucking understand at all.  

    We are building a team that is continuously being built. - Sarah Palin

    by burrow owl on Sun Oct 18, 2009 at 10:03:54 AM PDT

    [ Parent ]

    •  I think that is exactly what the commenter (0+ / 0-)

      was saying, that MBS's and CDo's are not derivatives.

      Patriotism may be the last refuge of scoundrels, but religion is assuredly the first.

      by StrayCat on Sun Oct 18, 2009 at 11:03:12 AM PDT

      [ Parent ]

    •  A CDO is sliced and diced (0+ / 0-)

      unlike an MBS. The mortgages have been separated into different income streams, different 'tranches' representing risk and then bundled into securities with a large number of other little bits. One difficulty with valuing them was the problem with actually finding the underlying mortgages. In an MBS, that's easy. Its difficult to imagine what a CDO offered to the market beyond a way to hide money. It certainly has no redeeming features for the homeowner.

      "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

      by johnmorris on Sun Oct 18, 2009 at 08:54:27 PM PDT

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site