Synthetic CDO: What It Is (And Why It’s Controversial)

Synthetic CDO: What It Is (And Why It’s Controversial)

What is a synthetic CDO, or synthetic collateralized debt obligation? A synthetic CDO is a type of CDO that bundles credit default swaps into a new financial product. While a traditional CDO is valued based on cash assets like mortgage payments, the value of synthetic CDOs comes from the premiums paid on bets that certain bundles of securities (like mortgages) will default. We’ll cover what synthetic CDOs are, why they’re so confusing, and how their involvement in the 2008 financial crisis makes them controversial.

Cover & Move (From Jocko’s Extreme Ownership)

Cover & Move (From Jocko’s Extreme Ownership)

Chapter 5 explores the Cover and Move strategy. On a battlefield, Cover and Move allows a team to work together to reach a destination: One group provides cover — keeping an eye out and having weapons ready to ward off enemies — as the other group advances forward. Then they switch roles, essentially leapfrogging forward, until they reach their destination. This may not appear to have much relevance outside a war zone, but the principle of Cover and Move is teamwork. The entire team must work together, supporting and protecting each other, for everyone’s safety and success. Everyone on the

Shorting the Housing Market: How It Works and the 2008 Payoff

Shorting the Housing Market: How It Works and the 2008 Payoff

What does it mean to “short” the housing market? How did investors who shorted the housing market in the early 2000s benefit from the events leading up to the 2008 financial crisis? Shorting the housing market is a way of placing a bet against the market. If homes fall in value and the housing market declines, people who have shorted the housing market benefit. Learn how shorting the housing market works and how investors who did it predicted (and benefited from) the 2008 financial crisis.