cdo

This feature led to massive losses and would have done so, according to one CDO investor, even if the housing market had not collapsed.

The trouble was that Paulson needed buyers of the CDO, in order that it could be a seller.

Assets were bundled into a pool, securitised, stuffed into a CDO, bits of that plugged into the next CDO and so on and on.

He told me with a straight face that these CDOs were the only way to get rid of the riskiest tranches of Subprime debt.

Defaults haven't been a major problem, but the market values of these CDOs fell sharply over the past year or so.

For much of the mortgage boom, Merrill was able to sell the bulk of the CDOs it underwrote to investors all over the world.

Vertical was not the only example of a CDO constructed by one bank to the apparent benefit of another.

Modern finance is supposed to be all about measuring risks, yet corporate and mortgage-backed CDOs were a leap in the dark.

Shockingly, two-thirds of that stemmed from supposedly triple-A CDOs, which by then were deemed to be worth only half of their face value.

Goldman has even referred to the investors who bought its CDOs as "among the most sophisticated mortgage investors in the world" .

(On occasion, each of a pair of CDOs would buy a tranche of the other, creating a "loop" that slowed analysis).

Various CDO managers would be asked by banks if they would go along with this sort of thing.

You could still run Intex, first for each of the securities and then for the CDO, but it could be a slow process.

The CDO fiasco was an egregious and relatively rare case of aninstrument getting way ahead of the ability to map it mathematically.

ProPublica notes that the CDO deal prospectuses did not disclose Magnetar's equity role, or detail its other positions.

CDOs were one of the main vehicles through which risky US mortgages were repackaged and sold to investors around the world .

It definitely embraced them with Abacus, keeping IKB in the dark both about Paulson and its own view of mortgage CDOs.

So far, Morgan Stanley estimates that about $123bn of these defaulted CDOs have been liquidated.

But faith in the financial alchemy of this single currency has spectacularly crumbled, just as faith in those CDOs fell apart.

Why was a firm like Mr. Paulson's allowed to choose the securities in the CDO it was planning to bet against?

The firm also said the SEC completed a review of other collateralized debt obligations created by Goldman.

On paper, the eurozone does not look exactly like a CDO, since eurozone governments have never tried to "bundle" their debt.

They would never have taken such a punt on high- yield securities or equity tranches of collateralized debt obligations (CDOs ) .

Thus, it could never compensate UBS fully for any meaningful loss in value of the $1. 3bn UBS was trying to insure, it claims.

It was an edge the investment banks deployed against "long" investors on the other side of CDO trades.

They also lent buyers much of the money to bid for CDOs, certain that the securities were a sound investment.

For instance, a BBB tranche in a CDO might pay out in full if the defaults remained below 6%, and not at all once they went above 6. 5%.

These were precursors to CDOs, the pools of mortgage-backed securities that were to wreak havoc on the global financial system years later .

Now, the estimated market value of the CDOs is at least $45bn, according to several people with direct knowledge of the portfolio.

Golman told the investors, including some European banks, that ACA Management, an independent third party, picked what went into CDO.

At the time of the Fed intervention, the value of the CDOs insured by AIG was falling dramatically and AIG was facing a credit downgrade.

The cash flowing from mortgage payments into a single CDO had to filter up through several layers.

One of the pioneers of structured credit in the 1990s, JPMorgan is a leader in parts of the CDO business.

The losses the banks began to take against their holdings of CDOs were staggering.

It could promote the interests of favoured investors, use CDOs to hedge its own loan book or even take a trading position.

Just as with Abacus, Morgan Stanley's role was not disclosed to investors in the CDO.

After all, few of us ever deal with collateralized debt obligations, exclusive hedge funds or complex billion-dollar derivative products.

Analysts believe AIG originally valued these contracts by looking to prices supplied for a pool of CDOs, among other factors.

' Other CDO investors admit they didn't read or overlooked certain risk disclosures spelled out in the prospectuses.

For the sake of propriety, they employed a third-party CDO manager or selection agent to select and watch over the pool of mortgage bonds.

Financial history has nothing to compare in sophistication and complexity with the collateralized debt obligation.

After all, "exotic" ETFs are still a small proportion of the overall market, and the instrument is not as inherently risky as, say, CDOs.

The most common skill used to decompose the correlation matrix for CDO products is the Cholesky decomposition.

So in a synthetic CDO, those who owned the riskiest tranches got more of the premium but lost out when defaults occurred.

Now that the CDO market is in the deep freeze, thanks to all those subprime-related losses, that source of demand has dried up.

Derivatives known as collateralized debt obligations (CDOs)are a clever way to satisfy every taste.

Losses can become viral: Lang Gibson, a Merrill Lynch analyst, characterized the potential for losses in CDO pools in a recent report.

As the CDOs declined in value, AIG had to pay out cash to the CDO owners, including investment banks.

Paulson was able to exert the influence it did because of the informal way in which Goldman and other investment banks put CDOs together.

Investment banks on Wall Street answered this demand with the MBS and CDO, which were assigned safe ratings by the credit rating agencies.

Although the SEC focused on an arcane synthetic collateralised debt obligation known as Abacus 2007-AC1, its complaint is a spare 22 pages.

It should also be noted that CDO-based event sinks operate synchronously, and there is a time limit of 60 seconds to process the message.

Third parties must change their instructions about installing CDO from using the Office CDO to installing from the Internet.

Structured credit bankers specialising in cash CDOs will be the hardest hit this year as the impact of market turmoil takes its toll .

Goldman insiders say this was due to the timing of the CDO, just before the end of the US housing bubble in April 2007.

He added that values assigned to a type of CDO by one firm can't simply be read across to holdings of another.

Goldman insiders said they had no evidence that Mr Tourre acted illegally or unethically when marketing the CDO to clients.

Once that happens, the holders of the top tranches, those once rated triple A, can opt to liquidate the CDO.

The case centres on a synthetic collateralized debt obligation that Goldman structured and marketed.

Traditional CDOs bundled bonds into portfolios and then split those portfolios into tranches, depending on investors' appetite for risk.

The generous yield provided by those tranches suggested they were much riskier than widely assumed.

Customers of third-party applications that require CDO. DLL now receive a message informing them that an object could not be found.

Often, CDOs included not just mortgage-backed securities, but tranches of other CDOs, each maybe incorporating further CDOs.

In presentations to investors this year, it emphasised how thoroughly its AIG Financial Products arm assessed the risks of insuring CDOs.

If you want more detail about specific settings, you can refer to the CDO production documentation.

Hence the decision to move into the complex business of insuring CDOs and playing a role in their construction.

Bear Stearns last month revealed large losses at two hedge funds that owned subprime-related CDOs - but had trouble quantifying the losses.

Collateralised debt obligations were clearly destructive.

Goldman owned securities called collateralized debt obligations.

The Magnetar controversy centres on how it financed its bet against the triple-A tranches of CDOs that Citi trusted.

These securities are collateralized debt obligations backed by subprime-mortgage bonds, commercial-mortgage loans and other assets.

Mr Tourre was responsible for the CDO, known as ABACUS.

Moreover, a major CDO trader at Deutsche Bank sold an enormous volume of similar securities, earning nearly $6 billion for the firm overall.

If the funds lost most of their money in May and June, they must have held positions other than highly rated CDOs.

As long as these CDOs are not liquidated, they typically allow for payments to service providers, including ratings agencies.

The order had "come down from on high that it was a good thing to buy CDOs" .

Such collateralised debt obligations bundle together debts and slice them into tranches of varying return and risk.

CDOs built solely out of subprime mortgage debt became the rage.

Send items by using Collaboration Data Objects (CDO) or Simple Mail Application Programming Interface (Simple MAPI) calls.

Had they known the truth, the SEC claims, they might never have bought the CDO.

In 2006 and early 2007, no less than $450bn worth of these "CDO of ABS" securities were produced.

Lord knows where this leaves us, since only He knows what a credit default swap (CDS) on a collateralized debt obligation (CDO) is worth.

According to a recent report from ProPublica, there were 26 deals in which Magnetar, a hedge fund, both sponsored CDOs and bet against them.

The ratings agencies may move shortly to reassess CDOs, but the investment banks have seen no deterioration in their own ratings.

Overall, commercial-real-estate write-downs in the first quarter are expected to rival those for CDOs and leveraged loans.

"IKB had an army of PhD types to look at CDO deals and analyse them, " says one CDO investor.

But unlike a mutual fund, a CDO has different tranches that give investors different rights over this portfolio.

The rating agencies that gave CDOs such absurdly high ratings, though not named in the ABACUS case, should also worry.

Based on students' feedback, CDO encourages enterprises to hold off- campus events near campus whenever possible.

At first blush, this might seem surprising. After all, during the boom years for CDOs, the two products were closely intertwined.

At first blush, this might seem surprising. After all, during the boom years for CDOs, the two products were closely intertwined.

Not least because ETF's (unlike CDOs) are often sold to retail investors.

Decoded: Goldman would sell CDOs stuffed with other investment banks' toxic waste, allowing them to short it.

Other big banks also may need to reassess their CDO holdings in light of Merrill's sale.

To use banking jargon, what a CDO does is provide "credit enhancement" , turning dodgy debt into something that looks safer.

It has also been hard for investors to find good lawyers if they wanted to sue a large investment bank over, say, a CDO.

These were the investments Paulson wanted included in a new CDO.

Banks also structured CDOs that were seemingly designed to incur losses for long investors.

bility of using CDOs to offload the toxic risks in rivals' balance sheets on to clients.

In a marketing document, Goldman stated its interests were "aligned" with investors because it would buy equity in the CDO.

Goldman went "short" on Hudson Mezzanine, buying protection on the entire value of the CDO, according to internal documents.

Even fewer know or care about collateralised debt obligations or credit default swaps.

The potential damages are huge: on average, these CDOs lost more than a billion dollars each.

CDO become the main cause of the subprime mortgage loan crisis.

Collaboration Data Object (CDO) is an extensibility library that is provided by Microsoft Exchange and used with the MAPI protocol.

Unfortunately, the subprime crisis of ABS, MBS and CDO because of the credit atrophy mostly became the lack of financial asset liquidity.

The CDO had three investors: Paulson, securities firm ACA Capital Ltd. and German bank IKB Deutsche Industriebank AG.

Investment banks also expanded into the underwriting and selling of complex financial securities, such as collateralised debt obligations.

With wild swings in CDO prices, it could no longer take this as given.

Some members of the commission pressed for answers to why Citigroup didn't disclose its CDO holdings sooner.

Financial eggheads used them as building blocks in "synthetic" CDO-type structures, which are based on CDSs rather than actual bonds.

In one, a senior executive described a Goldman-underwritten CDO as "one shitty deal" .

It is another to figure out the value of the mortgage poolswithin a CDO, which will own a diversified pool of securities.

The sellers never expected the CDO market to drop through the floor.

This event is similar to the OnSubmission event, except that it offers no CDO version.

As a result, the CDO market is closed, and companies' access to credit - especially for leveraged buyout debt - has been severely curtailed.

Does this sound like a huge subprime CDO scam?

At exactly the same time, it was approached by Paulson & Co to structure a CDO that the hedge fund could make money by shorting.

The recent rally has been particularly marked for CDOs backed by corporate bonds and loans.

Morgan Stanley profited from the collapse of the deal.

By 2007, two trillion dollars of CDO bonds had been issued.

At the time, Mr. Tourre was putting together a synthetic collateralized debt obligation called Abacus 2007-AC1.

One of the center managers, now I lead all the centers in the CDO, they gave me couch.

Paulson then placed a 'short' bet that mortgages contained in the Abacus CDO would fall in value.

Sub-prime mortgages and collateralized debt obligations belong to the past.

The issuers of CDOs asked rating agencies to assess their quality.

Likewise, it was hard to gauge the exposures to "tail" risks built up by sellers of swaps on CDOs such as AIG and bond insurers.

CDO (Collaboration Data Objects) is a Microsoft technology that is designed to simplify the creation of messaging applications.

Through the alchemy of Mezzanine-CDOs.

Besides calling up CDO during office hours from Monday to Friday, do I have other channels to voice my suggestions enquiries?

In addition, to make the bonds saleable, rating agencies were appointed to adjudge their creditworthiness.

But if one CDO exemplifies the conflicts inherent in the investment banks' role, it was Vertical 2007-1.

The CDO simply reconciles these opposing bets, much as a bookmaker would.

The people familiar with the portfolio said that it would be difficult to sell all the CDOs because they are generally illiquid.

One reason why large banks crumbled last year was that many were carrying vast quantities of highly-rated CDOs and other toxic paper.

Also, the CDO sale didn't actually remove all the risk from Merrill's shoulders.

Merrill, for instance, had some $32bn in CDO-related exposure for the second quarter.

The contrast with the banks' behaviour in the CDO market could hardly be more striking.

CDOs aren't standardized products, and their values can differ based on a host of factors.

Now, however, those CDO dreams have crumbled.

Market and Sales Report to CDO sales leader on regular basis.

Merrill recorded $9. 4 billion of write-downs from exposure to CDOs, residential mortgages, bond insurers and other investments.

There are hundreds of non-Goldman CDOs that no one has yet investigated.

However, Collaboration Data Objects (CDO)-based programs such as Outlook Web Access depend on separate internal time zone tables.

Collaboration Data Objects (CDO) for Workflow that was included with Exchange 2003.

We firstly use the non-arbitrage methods on CDO pricing.

But, as with CDOs, this growth has come at a cost.

Access address information by using CDO calls.

By comparison, he foresees first-quarter write-downs of $10 billion in CDOs and $5. 8 billion in leveraged-loan commitments.

By 2007, CDO structuring was raking in billions of dollars for banks.

Between 2004 and 2007, the world of CDOs and credit derivatives exploded at a stunning pace, creating fat profits for some banks.

The major drawback of CDO-based event sinks is that the CDO interface adds overhead.

Access the address book by using CDO calls.

What is indisputable is that the Magnetar deals proved star-crossed, with almost all of them defaulting by the end of 2008.

Citigroup said it ended June with $22. 5 billion of subprime exposure.

So structured products such as CDOs looked a promising diversification.

The banks so liked CDOs that they held on to a lot of their own issues, even when the idea behind the business had been to sell them on.

This synthetic collateralized debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently;

Between 2005 and 2007, investment banks issued about $1, 100bn of CDOs.

This patch resolves problems that were found in the Exchange 2003 CDO since Exchange 2003 was released.

In the past ten years, CDO has got gigantic development in the bond market of Europe and America.

Most investors were happy to buy products such as CDOs because they trusted the value of credit ratings.

Nature of an arbitrage CDO: pool built around a security structure CDO

Risks and countermeasures of structured financial products: a CDO case

Preparation and Properties of CdO Thin Films

CDO chief domain name officer

The Design of Integrated CDO Based on the Multi-small-banks'Loans Pool

95 billion: value of all collateralized-debt obligations issued from 2003-07

For example, without this update CDO-based programs will operate in standard time during the following periods in 2007