2015: The Bubble Has Been Fully Restored: Goldman Is Selling A Synthetic CDO

Earlier this week, Bloomberg ran a story that carried the headline “Goldman Sachs Hawks CDOs Tainted By Credit Crisis Under New Name.” Here’s an excerpt:  “The 2008 financial crisis gave a few credit products a bad reputation. Like collateralized debt obligations, known as CDOs. Or credit-default swaps. But now, a marriage of the two terms (using leverage, of course) is making a comeback — it’s just being called something else. Goldman Sachs Group Inc. is joining other banks in peddling something they’re referring to as a ‘bespoke tranche opportunity’… The deals are ‘attractive for credit-savvy investors in the post-QE credit picker’s market,’ according to a January U.S. credit derivatives outlook by Citigroup Inc., The transactions offer the potential for higher returns than buying a typical corporate bond, especially if an investor focuses on first-loss slices or uses borrowed money.” This is the latest installment in a series of articles […] Read More