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

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  •  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 ]

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