> Any argument against a CDO is implicitly an argument against a mortgage backed security. In fact, CDOs by their nature can be _more_ decoupled from systematic

> Any argument against a CDO is implicitly an argument against a mortgage backed security. In fact, CDOs by their nature can be _more_ decoupled from systematic mortgage risk. I'm skeptical because it was CDOs that blew up, not more typical mortgage backed securities. I think the key phrase there is "can be." Complex software can be reliable, but it also can be a buggy mess or reliable except for that one bug that literally kills you. The complexity creates a situation it too much trouble to really understand it, so people treat it as a black box and just hand-wave and believe whatever they want. It seems CDOs had a similar problem, while perhaps regular MBS are simple enough that they don't.