The creation of the derivative has been wrong from the beginning. There’s no good reason for this to exist. Only that which is real should be allowed to be gambled on. Derivatives based on low-rated, high-risk debt? And they expect that it won’t fail? Are they out of their minds? Whatever. Here we go again…
A CLO is not exactly a CDO. But it is another bunch of garbage. Yes, it might spark the next crisis, but don’t worry, it’s just a small aspect of the financial system. The risk is contained. It can’t possibly spread to other investments. Even if it did, the Fed has our back. Ray Dalio said we have a few more years until a recession. Everyone shops at Amazon nowadays. Stocks always rise over the long term anyway…and now back to reality.
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The Bomb That Blew Up in 2008? We’re Planting Another One
CLO Issuance Is Far Surpassing Other Types Of Asset-Backed Securities
CLOs Have Hit a Peak When Mom and Pop Show Up – Bloomberg
Leveraged-Loan Protections Go From Bad to Worse – BNN Bloomberg