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George Chamberlin's Money in the Morning
Friday, August 10, 2007
Blame it on CDOs of ABS. That is the source of the problems that are rocking the stock and bond markets around the world. Unless you are a really serious trader you've probably never heard of Collateralized Debt Obligations of Asset-backed Securities, but that the source of all of the consternation these days. In particular, hedge funds that have made leveraged, highly speculative bets on the subprime mortgage market. It really has little to do with the underlying loans, but rather the technique used by traders.

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