San Diego Daily Transcript executive editor George Chamberlin, previously criticized here for his dubious fact-checking skills, took a stab at the topic of Collateralized Debt Obligations (CDOs) last week. The result was less than exemplary. From his Friday "Money in the Morning" column:
Blame it on CDOs of ABS. That is the source of the problems that are rocking the stock and bond markets around the world. Unless you are a really serious trader you’ve probably never heard of Collateralized Debt Obligations of Asset-backed Securities, but that [sic] the source of all of the consternation these days. In particular, hedge funds that have made leveraged, highly speculative bets on the subprime mortgage market. It really has little to do with the underlying loans, but rather the technique used by traders.
I’m not sure you need to be a "really serious trader" to have heard of CDOs. I don’t even think you need to be a not-serious trader, or any kind of trader at all — just someone who reads the news. We at voiceofsandiego.org, along with many mainstream media outlets (including the Transcript itself!) have been writing about them for quite a while now. Heck, they’ve even been written about in that sophisticated news source read exclusively by serious financial professionals: USA Today.
The "serious trader" line is funny; the last sentence in the paragraph is just outright wrong.