CDOs For Dummies (Yes, Congress, We Are Looking At You)

Tyler Durden's picture

Every now and then, congressmen (and their staffers) have a knack of taking a terrific opportunity to investigate the alleged criminality at the apex of Wall Street (such as Tuesday's hearing with Darth Blankfein), and blow it by 1) pursuing personal agendas that have nothing to do with the matter at hand and 2) having no understanding of the matter at hand. And when the matter at hand is something as complex as CDOs (just ask Lloyd or Ben Bernanke - both will tell you that only Goldman understood these products well enough to trade them, and that only the Fed is smart enough to regulate them), televised embarrassment is sure to follow. Which is why we have prepared some bedside reading for all those who intend on grilling Lloyd on Tuesday.

We start with the CDO bible which everyone should read (after all JPM created CDS - they know more about synthetics and structured products than anyone else):

And just if there is any left over confusion we present:

And amusingly:

Make us proud congress