I didn’t understand a lot of this. It did, however, give me the basic concepts of Collateralized Debt Obligations (CDOs).
You’ll remember CDOs from August. They were often mentioned as being somehow behind the sub-prime mortgage crisis.
I think former Fed Chairman Alan Greenspan said recently the problem was that you can’t properly assess the risks involved in these products.
I suspect that while the Wall Street financial wizards were doing all their high level math on assessing the risks involved in these CDO’s, the B students in the mortgage industry were taking them to the cleaners with basic mortgage fraud.