Articles like this are often annoying to me. Not because I take the banks side, but because they are uninformed and misleading. This one is a bullseye. The CDO is Satan incarnate. Dating back to derivatives trading in the late 80s, this evil progeny of junk bonds has been the great creator of illusory value of the last quarter century. I have blamed these patterns on the usual suspects, greed, stupidity, and hapless regulations. It is far worse than that. We have brewed a perfect storm, fueled by electronic wizardry, behind-the-scenes manipulation, and the systemic failures of the cops to keep up with the robbers. In my youth I spent a summer writing a 62 page student comment on a landmark SEC case on insider trading. I dont even know how you would begin to draft rules governing this stuff. Know what is really scary? Nobody does.
Posted on: Sun, 13 Apr 2014 20:13:28 +0000
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