Synthetic collateralized debt obligation (synthetic CDO)
Loading...
Link to this comment:
Uploader Comments (bionicturtledotcom)
All Comments (22)
-
So synthetic CDOs expose investors to less risk than normal CDOs?
-
who act as the underwriters?
-
....likely to default, as they would lose out if this happened
-
Ngopalakrishna, if the bank is exposed to the riskiest piece, it acts as a measure to ensure that the bank (originator) doesn't fill the asset pool with assets that are like
-
Sorry, but it is not clear why the bank will retain the riskiest piece of the whole tranches - the equity/residual tranche!! Could you kindly elaborate pls? thank you!
-
Sorry, but it is not clear why the bank will retain the riskiest piece of the whole tranches - the equity/residual tranche!!
-
Int he video it is mentioned that the investors are payed out of 3 sources of cash flows: 1. cds premium 2. interest on the collateral 3. the collateral itself. How ever, the collateral is only payed out at maturity. So, are the cds premium and the interest on the collateral sufficient to meet obligatiopns of the SPV towards the investors? I can hardly imagine.
-
who would the trustee be ?
-
So basically a SCDO is insurance?
-
Thanks for the explanation! It really helped out!
7:36Collateralized debt obligation (Balance Sheet CDO)by bionicturtledotcom27,035 views
Featured Video- 10:31Profitability Ratios, CFA L1 (Financial Stateme...by bionicturtledotcom97 views
- 8:04Solvency Ratios, CFA L1 (Financial Statements)by bionicturtledotcom155 views
- 7:32Liquidity Ratios, CFA L1 (Financial Statements)by bionicturtledotcom293 views
- 4:14Dave learns R: first plotby bionicturtledotcom504 views
- 4:19Collateralized Debt Obligation Overviewby khanacademy9,720 views
- 3:37Collateralized Debt Obligation For Beginnersby moneyandsociety8,760 views
- 8:42ABCs of CDO (CLO, CBO, CDO of ABS)by bionicturtledotcom32,108 views
- 8:53Synthetic CDO that fails in subprime securitiza...by bionicturtledotcom25,552 views
- 1:27Collateralized Debt Obligation derivativesby kxmode1,440 views
- 9:28CDS and Synthetic CDOs Explainedby TAMCOForensicGroup4,808 views
- 11:11Understanding the Financial Crisis - very well ...by dardoush203,808 views
- 8:20Using Excel to calculate Black-Scholes-Merton o...by bionicturtledotcom56,346 views
- 10:44Bailout 11: Why these CDOs could be worth nothingby khanacademy33,772 views
- 7:42Calculate forward given spot rateby bionicturtledotcom32,081 views
- 9:40Goldman Sachs Abacus SCDOby bionicturtledotcom4,249 views
- 8:15Don't Panic!!!! The dollar and the stock market...by jennyliao77428 views
- 6:02Synthetically Long Position with Credit Default...by bionicturtledotcom4,399 views
- 5:12Asset-backed commercial paper (ABCP) conduit to...by bionicturtledotcom11,666 views
- 9:17Mortgage-backed securities IIIby khanacademy87,234 views
I like the bit where you mention the 'Risk-free High Quality Asset' earning interest.
How did it earn interest exactly? Don't tell me they bought more CDO's with it!
I'm sure this all looked very smart at the time, the fact is a lot of these things are full of lemons. The only motivation was to keep the whole ponzi scheme going and make sure the bosses got another years worth of mega bonuses.
Got to hand it to them thought - this was one hell of a scam!
StevenL001 3 years ago
The high quality asset part is true, it's not the weak link. I don't disagree with your conclusion, but in order to identify good versus bad securitization (which after all is generally useful), we've got to first understand it. David
bionicturtledotcom 3 years ago