Team Hedge Fund

“Wall Street created fake demand for their hottest product – mortgage-backed securities called collateralized debt obligations [2] – in the two years before the financial meltdown. Their activity increased banker bonuses but ultimately made the crisis worse… we found 85 instances during 2006 and 2007 where two CDOs bought pieces of each other’s unsold inventory. These trades, which involved $107 billion worth of CDOs, approximately a fifth of the market, underscore the extent to which the market lacked real buyers. Often the CDOs that swapped purchases closed within days of each other.”
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1. Bloomberg Takes a First Step at Piercing the Veil of Secrecy Surrounding CDOs
2. Fun With Charts: The Timeline of the Magnetar Deals
3. How Lou Lucido Let AIG Lose $35 Billion With Goldman Sachs CDOs
4. Questions for Banks That Put Together Deals
5. Hedge-Fund Ownership Of Financials At All-Time High