If Credit Market Tightens, CDO Boom Could Go Bust
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Feeling a little insecure about our grasp of Collateralized Debt Obligations, we dropped in on the Bond Market Association forum on the subject. Talk about jumping into the deep end of the pool! One speaker’s actual sentence: “This year we did our first mezz synthetic ABS CDO.” What was he talking about? For many of us, he might as well be speaking in tongues.
The problem with simply ignoring this bewildering market is that it is not about to go away. On the contrary, it is growing like mad. According to a report by Celent, “Since 1998, the CDO market has experienced an average annual growth rate of 150%. Celent estimates that the overall CDO market represents over $1.5 trillion and will grow close to US$2 trillion by the end of 2006.”
A login link has been sent to
Enter your email to read this article.
Get 2 free articles when you subscribe.
