The analogy here is that the CDO is a financial product that's built from other debts. Specifically, it was a piece of partial ownership on a bunch of mortgage

The analogy here is that the CDO is a financial product that's built from other debts. Specifically, it was a piece of partial ownership on a bunch of mortgages in 2008. The issue here is that when the junk mortgages defaulted, the CDO also went sideways [1] In any case, what the author is thinking about is more "systemic risk" (think leftpad or cascading DNS failures) rather than debt-based analogies. One big reason 2008 became such a big mess was the systemic issues, not building products on debt [2] 1. Fun fact - before 2008, they had started making CDOs out of CDOs because of of the insatiable appetite for mortgage-backed financial products. When mortgages are underwritten for people withouth a job, and packaged in a product with a AAA credit rating, it turns out it's a profitable thing to sell. 2. Also the fact that Lehman and Bear Sterns had leverage ratios in the 30x-40x range, which is insane.