Collateralized Debt Obligation (CDO)
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Introduction to collateralized debt obligations (to be listen to after series on mortgage-backed securities.
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25 Responses to “Collateralized Debt Obligation (CDO)”
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Great! Channel and I look forward more informative videos. Keep It up!
You just agree to pay –write a check– to someone. That someone may do whatever they want with your promise to pay including selling that promise to someone else (this happens all the time)
I see where you are going. If we didn’t have the profession of economics, the world would still spin, people would still buy and sell. Economics is just a way of creating models of how we should that. The more clever you are in creating those models, the more advantage for your employer or special interest has. Money is a useful term, however, it is a creation of man. It can be anything we want it to be. Some very clever people have convinced us with models that our current system is best.
I’m not an expert. I think it is because a CDO is not a Security. Thus it cannot be a Risk Adjusted Mortgage Backed SECURITY. A CDO is actually just a law contract, and they are usually constructed with copious input from lawyers. The contract simply says when and how different investors will receive returns based on how the risk was adjusted between them.
I’m pretty sure it is, as economics these days is little more than a ‘club’ unto which only people who really don’t want to work real jobs look into.
Nothing happens any more, no real trade, just fraud and money laundering, and that’s NO conspiracy, even watching half of khan’s videos will show that. And the terminology IS misleading, for example:
MONEY, CAPITAL, STIMULUS.
None of these mean what people think.
Capital isn’t on computers.
Money isn’t paper.
Stimulus, don’t start me!
Thanks for the input but I’m not looking for a conspiracy theory. Please don’t muddy the waters, this stuff is confusing enough. The fraud is easy to see here however I’m sure not every term in economics is meant to mislead.
It misleads people, the reason anything in economics has any name at all is to mislead.
Would you rather read a book titled, how to cook or how to keep your produce healthy within a heating enviroment.
It’s all about word play, just like a credit default swap, basically, fraud.
Exactly where did this collection of “collective borrowers” come from? That statment is misleading. Where in the mortgage contract, that each individually signed, does it say that they agree to CONVERT their INDIVIDUAL promise to pay into a collection of co-obligators to pay? My mortgage gives a “right to tranfer” NOT a right to convert it into something else.
Thanks for exposing what seems like the BIGGEST FRAUD SINCE THE DISCOVERY FIRE.
nice videos dude…did u learn all of this on ur own time or did u major in accounting or something similar?
Very good video, thank you!
OK so I saw all your videos up to this one so far and I understand them all. This question may seem silly but here it is. IF Collateralized Debt Obligation is simply a Mortgage-Backed Security (or asset backed security) organized to provide different returns for different levels of risk, THEN why such a drastic name change. Shouldn’t they have named them something like Risk Adjusted Mortgage Backed Securities? Or why change the name at all? Did they evolve separately or something?
It is, the investment banks are on the top.
Im kidding. (sorta)
great info bro peace.
the more that you help me understand this mess. the more that it looks like a Pyramid scheme.
Because the originating local bank has no risk in the mortgage after it sells it to the investment bank, the local banks gave mortgages to high risk borrowers, flooding the system with worthless paper.
tonyalfrey ..not happy = no need to watch.
one question, how did this lead to non-deposit mortgages?
This is the trial: men have loved darkness more that the light, because their deeds are evil-Gv 3,19
Now I want to meet you and all the good in a universal and permanent prayer all good for your heart and all that is good for the world every Monday of your life, from 20 to 21 I will be with you in spirit, with my love until the end of the world!
No matter your religion or your atheism I am still near you in your prayers! God bless all mankind, protect you and help you throughout AMEN ALLELUIA
pie = we r screwed
Asset Backed Security (or ABS) is the most general term that would cover all of the above (including MBSs)
Very easy to understand. Top marks. I have a question: What would the specific term be for the credit card (or auto loan) equivalent of an MBS?
This is very interesting since u can do this with any type of debt including personal loans that are collateralised in other words backed with some sort of assets such a car or something.
I stand by my comment which, perhaps, WHEATTHINS might want to read again so that he/she may understand it better. I will re-phrase it for his/her benefit.
a. The video is instructive.
b. The video would be much better, and for some, more credible, were the presenters tools working properly.
It would have been easy to have stopped the video, fix the tools, and re-shoot. That would improve the professionalism of the end product (sorry for the mixed metaphor).
As someone who has followed Sal’s videos from Trig right up to current Calculus class (and these videos as an aside to current events), I’m going to say anyone who doubts his “veracity” or “professionalism” is merely doing so to get a dig in on a Friday night.
Your issues/fussing with your “pen” consume half of what would otherwise be an instructive video and make your audience doubt your veracity and professionalism. Prepare your tools in advance.