There were some critical flaws in the logic though. The risk calculations for the synthetic CDOs that mixed the lower tiers of loans and that diversification ma

There were some critical flaws in the logic though. The risk calculations for the synthetic CDOs that mixed the lower tiers of loans and that diversification magically made them suddenly prime ignored the possibility of any kind of event that would affect the market generally; say a recession or in this specific case lots of adjustable rate mortgages changing to higher rates when the initial rates expired? The idea of creating an instrument like that is fine but the analysis of the risk and the layering of them together created an impossible to analyze time bomb. Also no one sold me a CDO gun they sold someone else a gun and it threatened to sink the global economy riiiiight as I was going into college. Luckily software engineering weathered the period fairly well and I was able to get a job when I graduated in '13. These things don't just impact the buyers and sellers they incentivize and potentially warp the entire economy and when the sellers and buyers screw up they're not even left holding the bag.