The money is already funded upfront by the investors and locked into the CDO. The banks are "safe" (at least, to the extent . But the money is parked in treasuries in the mean time. People don't realize yet that when major tranches get hit, the SPV's will sell off those treasuries (of maturities matching those of the CDO) that are not already part of a collateral agreement with the CDS buyer, and without arbitrageurs to make markets efficient these days, the sovereign yield curve will be warped into outerspace.

Now the best parts:

• some existing ARM are based on such treasuries
  
• all new fixed-rate mortgages are based on such treasuries.

Of course, the "safety" of the banks is limited to the total amount that they locked into synthetic CDOs and CLOs (which I always thought were evil). But that amount is not so much, in the hundreds of billions of dollars, but certainly not in the trillions as the article seems to imply. So at some point, that cashpile may get exhausted too...

Pierre