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The example I had in mind was Goldman and AIG. AIG had lost effective internal controls when the former CEO departed and insured below reasonable cost. I do not know if buying a CDO makes sense to free up capital if the CDO is properly priced. I will bet that lots of CDO issuers on Greek debt would be happy to give back  premium they have received and then some to be off the hook on those CDOs. And even good rocket scientists make rockets that explode.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Jun 16th, 2011 at 12:41:13 AM EST
[ Parent ]
Not CDO (Collaterallised Debt Obligation - a kind of Asset-Backed-Security) but CDS  (Credit Default Swap).

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Jun 16th, 2011 at 01:56:27 AM EST
[ Parent ]
Yes, I realized that, but yesterday was a day from Hell! I will make a post in the OT.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Jun 17th, 2011 at 02:24:46 PM EST
[ Parent ]

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