BSC, LEH, GS, BAC, etc who made hugh sums of money from the CDO and securitization process, should be forced to participate in a deconstruction and workout of these CDO's and other sophisticated financial structures which can not be properly priced.
John.. I must be missing something.. These banks originated loans, sold them off as CDO/CMOs to investors, and then the market for those CDO's/CMO's collapsed and they were rendered, essentially, worthless... It was as if the property that was collaterizing these loans was just as worthless.. right?
So here the banks will buy them back, right? But they will be buying them back at a discount to the value they originally sold them at, correct?
So does it not stand to reason, when this this CDO/CMO market "reliquifies" as the fear dissipates, that the banks stand to make a ton of money at the expense of the investors who originally purchased them?
Tell me where I'm mistaken in this logic.. I'm really trying to get a grasp of all of this off-balance sheet stuff..
Hawk |
