One Bad Apple, or a Rotten Bunch?

There's a time-honored CDO dictum,
When a firm's charged with fleecing a victim:
Every other firm too
Will conduct a review
Of the tranches it sold, and who picked 'em.

The Goldman-Paulson Case: Pro & Con

Institutional buyers of debt
Are big boys and deserve what they get,
But if some of those boys
Knew who cobbled their toys,
They may not have invested, peut-être?

Overheard at the Desk of "Fabulous Fab"

"This CDO's fit, if you please,
For a carry trade like IKB's,
With a mortgage portfolio
Hand-picked, as I told you,
By investors with deep expertise."

Abacus 2007-AC1

Said John Paulson, "Subprime will tank,
And I'd like to take that to the bank."
Said Goldman, "We'll fashion
A short you can cash in
From the Kool-Aid our dumb clients drank."