Excellent explanation of the financial situation

For those of you, like me, out there with little financial understanding, I submit this quick video which helped me understand the concept of collateralized debt obligations or CDOs. It is my understanding that mortgage-backed securities (MBS) are at the heart of the trouble we are seeing.

If those of you with a better understanding of this topic have thoughts on this, I would love to hear about them.


  1. Gene,

    Thanks for the additional explanation. I mistitled the post, I should have specifically mentioned that this was about CDO/MBS.

    I wholly agree that the Community Reinvestment Act (and for that matter the Federal Reserve) made a major contribution to the mess.

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