[groanup]

Just as Mr. Stein says, some of the CMO tranches were low risk and a lot of those have paid off and disappeared.

Shorting a CMO (I don't know what he means by shorting "indexes") could be a dangerous game because you have to eventually make a delivery of that which you sold. Each and every tranch of each and every CMO is different. You don't short that because you can't go out and borrow it.

Can you toddster?

[NVDave]

There’s all sorts of indexes in debt products that you won’t see in the retail market that are created and used by investment banks.

Here’s a CMO index created by Merrill:

http://www.ml.com/index.asp?id=7695_7696_8149_63464_72859_73444

[Toddsterpatriot]

You don't short that because you can't go out and borrow it.

Can you toddster?

You might be able to borrow it, if it was an especially large issue, but I've never heard of that happening.

If they make a market in a security, they can short it, in fact they have to have the ability to go naked short to keep an orderly market. Not sure if that's what Ben is talking about.

I'm not aware of any CMO index, but so many new things have been created in the last 10 years, anything is possible. Most likely, Ben is making stuff up.