4 ms·
The article is conflating two distinct issues - CDS warping incentives, and CLOs. CDS is primarily relevant to bonds that trade on the open market. CLOs are pa
by ikeboy 8y ago
The article is conflating two distinct issues - CDS warping incentives, and CLOs.
CDS is primarily relevant to bonds that trade on the open market. CLOs are packaging private loans made by banks, not bonds. To treat them as relevant to each other demonstrates the author has no clue what they are talking about.