No, we just repackage it, with a bunch of other sh*t that didn't sell and put it into a cdo.
A cdo?
Yes... a cdo.
What is that? W where we take a bunch of Bs, bb's and bbb's that haven't sold, and we put em in a pile... And when the pile gets large enough, the whole is suddenly considered 'diversified'.
And then... the whores of the rating agency, give it a 92 / 93 percent AAA-rating, no questions asked... Holy... what!
Say that again!
Collateralized debt obligations it's important to understand, because it's what allowed the housing crisis become a nationwide economic disaster.
Here's world-famous chef Anthony bourdain to explain.
Ok, I'm a chef on a Sunday-afternoon setting the menu of a big restaurant.
I ordered my fish on Friday, which is the mortgage bond that Michael burry shorted.
But... some of the fresh doesn't sell..
I don't know why, maybe it just came out, how Anthony has the intelligence of a dolphin.
So... what am I gonna do?
Throw all this unsold fish, which is the BBB-level of bond, in the garbage?
And take the loss?
No way!
Being a crafty and morally honorous chef that I am... Every crappy levels of the bond I don't sell... I throw into a seafood stew.
It's not old fish!
It's a whole new thing!
The best part is... They're eating retailed halibut!
That... is a cdo.
I just need to know how these could possibly be correlated.
You're like d-d- Dora the explorering, you're the first person who has found this... So.. Hold on..
