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Look at the securities or reference entities in the Abacus 2007-ACI $2 Billion Synthetic CDO. Every underlying residential mortgage-backed security in the CDO was rated Baa2 by Moody's or one notch above junk (high yield status) at the time. The mortgages were securitized in 2006 to early 2007 (see initial reference entities on page 56-57). You have to admit this was an amazing trade by Paulson & Co, shorting a pool of RMBS one notch above junk four months before two Bear Stearns credit funds blew up! These subprime RMBS and CDOs trading over-the-counter were ultimately backed by......Confessions of a Former Mortgage Broker: What We Did Was Criminal - Tech Ticker. Not that it matters now, but I find it funny that there's still zero price transparency with OTC debt securities and derivatives after what happened.
Other articles to read and an ABACUS flow chart: The Busted Homes Behind a Big Bet - WSJ
On Goldman, Synthetic Longs & Shorts, and S_ _ _ Sandwiches - Professor Pinch
Abacus for Dummies - Alea Blog
What Goldman's 'Victim' Knew - John Carney at The Daily Beast
Goldman's Dirty Customers - John Carney at The Daily Beast
Goldman Sachs shareholders sue execs - CNN Money
Goldman CDO man wrote "How I caused credit crunch" - Reuters
Abacus 2007 CDO Pitch Book Referenced Securities One Notch Above Junk Four Months Before Two Bear Stearns Credit Funds Blew Up
Look at the securities or reference entities in the Abacus 2007-ACI $2 Billion Synthetic CDO. Every underlying residential mortgage-backed security in the CDO was rated Baa2 by Moody's or one notch above junk (high yield status) at the time. The mortgages were securitized in 2006 to early 2007 (see initial reference entities on page 56-57). You have to admit this was an amazing trade by Paulson & Co, shorting a pool of RMBS one notch above junk four months before two Bear Stearns credit funds blew up! These subprime RMBS and CDOs trading over-the-counter were ultimately backed by......Confessions of a Former Mortgage Broker: What We Did Was Criminal - Tech Ticker. Not that it matters now, but I find it funny that there's still zero price transparency with OTC debt securities and derivatives after what happened.
Other articles to read and an ABACUS flow chart: The Busted Homes Behind a Big Bet - WSJ
On Goldman, Synthetic Longs & Shorts, and S_ _ _ Sandwiches - Professor Pinch
Abacus for Dummies - Alea Blog
What Goldman's 'Victim' Knew - John Carney at The Daily Beast
Goldman's Dirty Customers - John Carney at The Daily Beast
Goldman Sachs shareholders sue execs - CNN Money
Goldman CDO man wrote "How I caused credit crunch" - Reuters
