CDOs

[koganbot]

Good piece by Steven Pearlstein from last December that's helping me understand Collateral Debt Obligations better. ("Better" here is a relative term, however. Still wouldn't say that I understand them.)

It's Not 1929, But It's The Biggest Mess SinceNow, to truly understand I would have to know what was going on in this paragraph (Pearlstein has

Comments

[dubdobdee]

did you ever look at that econ diagram i linked to the one with the water and the buckets: i thought that got across how tranching works (and fails) quite vividly --- not sure if i can recall where i found it but it is linked by me in one of your earlier econ threads on lj

[koganbot]

Here are the buckets (though I think your verbal explanation is easier to understand).