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Liu says:
This is the structural un-sustainability of CDO securitization, irrespective of the state of the economy...
This sounds pretty specific.

I am still puzzled with what drove new CDO buyers to enter. There hadto be something promising - or was there no profit chain, only fear of loss?

It possible that the excitement with CDOs coincided with the first problems of subprime mortgages. Someone may have figured out that a way to get rid of "junk" packages (or to mitigate a subprime fallout temporarily) was to unwrap the pyramid potential of CDOs. On the other hand, I heard that CDOs were rarely traded... Was there only a frenzy of buying new CDO items?

by das monde on Sun Aug 19th, 2007 at 12:46:32 PM EST
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