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You missing the leverage part of the whole thing.

The problem isn't the CMOs (note my correction to my original comment.)  The problem is what happens once derivatives are spun using the CMO as the underlying asset.  derivatives have come far from their original use and the risks to the financial system have grown alongside.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Dec 16th, 2007 at 08:48:13 PM EST
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