"Financial Crisis-Era Derivatives Are Making A Comeback"

[applegrove]

Financial Crisis-Era Derivatives Are Making A Comeback

by Veronique Dupont, Agence France-Press

http://www.businessinsider.com/financial-crisis-era-derivatives-are-making-a-comeback-2013-8

"SNIP............................


Collateralized debt obligations, the complex financial instruments that cratered disastrously in the financial crisis, are back.

The market for the instruments, which were based on subprime mortgages, shrank from $520 billion in 2006 to just $4.3 billion in 2009 after the housing bust. Warren Buffett once called CDOs "financial weapons of mass destruction" because of their riskiness.

This time around, the investment has shifted from a mortgage-based CDO into a "collateralized loan obligation," a cash-generating asset structured similarly to CDOs, but consisting of loans to businesses.

Financial institutions have issued $50 billion in CLOs in the US in 2013, estimates the Loan Syndication and Trading Association, a trade group. The LSTA estimates the industry will issue $70 billion-worth in the US overall in 2013 and $100 billion worldwide.


...........................SNIP"

[Mnemosyne]

1. I've been seeing many "no money down" sales of houses around my area too. They never learn. nt