Collateralized Loan Obligations: New Threat To The Financial System? (Live Stream)

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In the 2008 financial crisis, collateralized debt obligations (CDOs) were invested into by banks and financial institutions. Within these CDOs were tranches of subprime mortgage loans. When defaults in subprime mortgage loans escalated, the plummeting value of CDOs inflicted huge losses onto their buyers creating contagion in the wider financial system.

Today, the collateralized loan obligation (CLO) has grown tremendously prompting us to look under the hood of CLOs. While they are different from CDOs, they do share similarities that we reveal in this live stream.

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Great episode! I'll be rewatching for sure.


It kills me trying to figure out housings exposure to risk. Tired of waiting to buy and this economic expansion seems never ending. Glad I have some PMs at least.

wildwest
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The global financial system is sucking the life out of the world economy.

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good job showing all the news cast good information!!!

martyalmberg
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Awesome discussion on CLOs, really appreciate that you talked about them in detail. I wonder how much of the REPO troubles if any is linked to the CLOs causing illiquidity and freezing of credit between pension funds, hedge funds, & banks or whoever holds them causing the FED to provide overnight liquidity? Is there any link between the two (REPO liquidity problems and CLOs) or do I do I have no clue what I'm talking about lol?

ConsciousOne
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Good morning from Guernsey channel island

nathd
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Would need to look at the MBS in detail to determine quality. Many of those mortgages were bought up on the cheap by property management companies that were given the money to do so. For example, Berkshire Hathaway has a real estate division and "owns" many home as rental units. BH will not default on payments, nor will the other large firms that now own these homes. At least that is true in the US.

noahlockwood
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Patrick - it was the Eygptians that threw their gold & silver in the street in the Exodus as the Jews were leaving Goshen, not an endtime sayin.

justustx
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Hungry now, got to get my cha quey teow

charleswilson