Synthetic CDO market heading for disaster?
Investment Dealers' Digest notes that the synthetic CDO market is a bit jittery right now. Standard & Poor's downgraded several CDOs arranged by Deutsche Bank and put others on negative watch due to their exposure to GM debt. The subsequent unwinding of positions reflected the nervousnesss over these instruments, which have gained popularity in recent years. Merrill Lynch issued a report saying, "We expect a rush to the door to be painful." Hedge funds could be affected.
> The Investment Dealers' Digest article. (exclusively for FierceFinance readers)
Comments