3 ms·

Collateralized Debt Obligation, sort of like a bond that's composed from many loans on something you can repossess, like houses or boats. They're notorious beca

Collateralized Debt Obligation, sort of like a bond that's composed from many loans on something you can repossess, like houses or boats. They're notorious because they were involved in the 2008 financial crisis. https://www.investopedia.com/terms/c/cdo.asp https://www.investopedia.com/terms/c/cdo.asp Or if you prefer the Big Short explanation: https://youtube.com/watch?v=EEXTqtH-Oo4 https://youtube.com/watch?v=EEXTqtH-Oo4

adhesive_wombat 3y ago
The Big Short also has an earlier explanation of a non-synthetic CDO ("we just repackage it [low-quality risky debt] along with a bunch of other shit that didn't sell and put it into a CDO"): https://youtu.be/xbiDrzTd8fE?t=260s https://youtu.be/xbiDrzTd8fE?t=260s