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As CDOs developed, some sponsors repackaged tranches into yet another iteration, known as "CDO-Squared", "CDOs of CDOs" or "synthetic CDOs". [ 8 ] In the early 2000s, the debt underpinning CDOs was generally diversified, [ 9 ] but by 2006–2007—when the CDO market grew to hundreds of billions of dollars—this had changed.
CDOs generated enormous paydays for all these companies. I estimate that they received fees totaling between $200 billion ($50 million times 4,000) and $280 billion for the $4 trillion in CDOs ...
Say it ain't so. It wasn't all that long ago the term "collateralized debt obligation" struck fear into the hearts of people everywhere: CDOs being widely known as one of the Wall Street ...
CDO-Squared is an investment in the form of a special-purpose entity (SPE) with securitization payments backed by collateralized debt obligation tranches.A collateralized debt obligation is a product structured by a bank in which an investor buys a share of a pool of bonds, loans, asset-backed securities, and other credit instruments.
The Big Short: Inside the Doomsday Machine is a nonfiction book by Michael Lewis about the build-up of the United States housing bubble during the 2000s. It was released on March 15, 2010, by W. W. Norton & Company. It spent 28 weeks on The New York Times best-seller list, and was the basis for the 2015 film of the same name.
The Securities and Exchanges Commission's allegations about Goldman Sachs (GS) fraudulently selling a synthetic collateralized debt obligation called Abacus raise several fundamental questions ...
The main difference between CDOs and derivatives is that a derivative is essentially a bilateral agreement in which the payout occurs during a specific event which is tied to the underlying asset. Other more complicated CDOs have been developed where each underlying credit risk is itself a CDO tranche. These CDOs are commonly known as CDOs-squared.
A synthetic CDO is a variation of a CDO (collateralized debt obligation) that generally uses credit default swaps and other derivatives to obtain its investment goals. [1] As such, it is a complex derivative financial security sometimes described as a bet on the performance of other mortgage (or other) products, rather than a real mortgage security. [2]