The
Price of Gold and CDO Structured Products
Greg
Silberman CFA, CA(SA)
A
repricing of the risk inherent in Collateralized
Debt Obligations (CDO) is underway with significant
implications for the price of Gold.
Here’s
the Problem!
Years
and years of monetary inflation have completely
desensitized us to risk. From a national, corporate
or even individual level, the availability of
cheap debt has conditioned us to borrow without
abandon.
And
nowhere has the debt binge been more apparent
than in the housing market. Low mortgage rates
have been a boon for homebuyers and created an
insatiable demand for structured products from
yield hungry investors. Eager to oblige, Wall
Street has been having a feast making loans to
homebuyers then packaging them up and selling
them to pension funds, hedge funds and large
insurers. The fees have been MASSIVE.
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Full Article
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United
States
Canada
