4 ms·
From Michael Blum's letter to Bernanke: "CDOs are like love. When they're good, they're great, but when they're bad, watch out." The linked paper itself is qui
by LiveTheDream 17y ago
From Michael Blum's letter to Bernanke: "CDOs are like love. When they're good, they're great, but when they're bad, watch out."
The linked paper itself is quite easy to read, though at 115 pages I didn't make it through the whole thing and resorted to skipping around. I'd love to see the tables of results put in perspective with a better visualization.
- wmf 17y agoWere there any good CDOs? An interesting aspect (in retrospect) of The Big Short is that some people spent huge effort determining which ones were worth shorting and other people seemed to make just as much money indiscriminately shorting all of them.
- LiveTheDream 17y agoFrom the thesis: J.P. Morgan’s CDOs consistently underperformed, while those from Goldman Sachs were among the top performers Also: CDOs rated by Fitch generally had less defaults than those without a Fitch rating. However, this result is not conclusive, as a number of other factors could be responsible for the lower level of defaults in Fitch-rated CDOs.