Collateralized Debt Obligations and Structured Finance: New Developments in Cash and Synthetic Securitization

The only CDO book that discussed phony ratings, dangers posed by extreme leverage made possible by credit derivatives, and fraud prior to the 2008 crisis. Wall Street cannot claim it didn't know.

This is the republished paperback edition of finance expert Janet Tavakoli's classic 2003 cutting-edge read on cash and synthetic collateralized debt obligations and credit market structures. It is the only resource that warned investors to "expect fraud." Tavakoli's analysis provides evidence that Wall Street knew or should have known the pitfalls of the products it sold prior to the financial crisis.

Tavakoli's analysis proved both prescient and accurate. She provided a then state-of-the-art look at the exploding CDO and structured credit products market. She exposed securitization topics never before seen in print, including the huge increase in the CDO arbitrage created by synthetics, the tranches most at risk from this new technology, dumping securitizations on bank balance sheets, the abuse of offshore vehicles by companies such as Enron, and securitizations made possible by new securitization techniques and the introduction of the Euro.

This valuable guide has been referenced by law firms, Congress, and scholarly publications. It comprehensively covers the fastest growing market on Wall Street prior to the 2008 financial crisis, predicting where new bank regulations and other developments would lead to product growth or product extinction.

While providing an overview of the market and its dynamic growth, Collateralized Debt Obligations and Structured Finance explores the types of products offered, hedging techniques, and valuation and risk/return issues associated with investment in CDOs and synthetic CDOs.

Structured Finance and Collateralized Debt Obligations, the second edition of this book, was published in September 2008, concurrent with the financial crisis, and continues this saga.

Janet M. Tavakoli, MBA (Chicago, IL), has over thirty years of experience trading, structuring, and marketing derivatives and structured products with major financial institutions in New York, Tokyo, and London. She is also the author of the classic expose, Credit Derivatives and Synthetic Structures, now in its Second Edition (0-471-41266-X).