A little light reading from

[no_such_reality]

A little light reading from the Philly Fed Reserve:

WORKING PAPER NO. 11-30/R
COLLATERAL DAMAGE:
SIZING AND ASSESSING THE SUBPRIME CDO CRISIS That’s the May 2012 report.

The August 2011 working paper had the following ditty in it’s abstract (Link):

“show how some 5,500 BBB-rated subprime bonds were placed or referenced into these CDOs some 37,000 times, transforming $64 billion of BBB subprime bonds into $140 billion of CDO assets.”

Both highlight that the 1999-2007 CDO market was only a $641 billion.

With a 75% loss rate (wow, way wrong I was), wouldn’t it have been a lot cheaper to just backstop the loss.