The Bomb That Blew Up in 2008? We’re Planting Another One [Derivatives: Collateralized Loan Obligations]
via bloomberg: Financial markets have short memories. Of late, they’ve convinced themselves that collateralized loan obligations (CLOs) are much safer instruments than the collateralized debt obligations, or CDOs, on which they’re based and which helped precipitate the 2008 crisis. They’re wrong — and dangerously so. Current CLOs outstanding globally total around $700 billion, with annual new issues … Read more