CDOs were used universally. Why? Because lenders make money by passing debt onto other business entities or other investors. No lender wants to take on the risk themselves. They want to pass it along to other people. Credit was like a hot potato. But loan originators were under pressure to write more and more loans. That was fine for a period of time. But it was a bit like playing monopoly with real money.
Video: Now even the Aussies are dealing with the Credit Crisis
Video: Now even the Aussies are dealing with the Credit Crisis
Psst, hey buddy, want to buy my debt?
;)
Thanks ex-tex!