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Good article.

As I have learnt on ET CDO and CDS has very little in common, except being scams that start with CD. CDO is a way to divide the cash flow from credit and pretend that the debtors can not possibly fail to deliver all on the same time, even if the credit is all crap to begin with. CDS are (apparently) a bet on if a credit will pay or not. So I guess you can take out CDSs on CDOs too, if you want to maximise your scamming potential.

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by A swedish kind of death on Mon Mar 12th, 2012 at 09:59:47 AM EST
[ Parent ]
I guess you can take out CDSs on CDOs too, if you want to maximise your scamming potential

That is what The Big Short is about.

There are three stories about the euro crisis: the Republican story, the German story, and the truth. -- Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon Mar 12th, 2012 at 10:01:44 AM EST
[ Parent ]
CDSs on CDOs is just the beginning... You can makes CDOs of those again, and then go on to cubic CDOs..

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Mon Mar 12th, 2012 at 07:47:14 PM EST
[ Parent ]
Sounds like a sequel to Inception.
by rifek on Tue Mar 13th, 2012 at 01:43:14 AM EST
[ Parent ]

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