Truth is Weirder than Fiction!

I am still learning about the famous C.D.O.s and the synthetic C.D.O.s (only referenced specific derivatives). It still seems spooky that there could be "investments" made without any specific collateral to back up the deal. It was a way to make money and surely, many did! But also, many lost big time!

In an article today, Joe Nocera makes clear that "our" fiscal nightmare would have never been so extreme if there were no synthetic C.D.O.s or Credit Default Swaps. At the same time, it is truly amazing that people, as Joe describes, could sit at a supper table and talk about their different conclusions about the worth of these swaps. One person thanking the other for "helping" him to gain more leverage in their strategy, knowing full well that only one of them would "win".