I've always viewed CDO's as being similar to "pointer-based" securities. GS sold the value of the pointer rather than the value of the data at the location. Li

I've always viewed CDO's as being similar to "pointer-based" securities. GS sold the value of the pointer rather than the value of the data at the location. Like any memory crash, when the value at the location is wiped out, any pointer to it is useless. Shorting the value of the pointer makes sense when you know ahead of time that the value at the location will soon be clobbered.