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portfolio.com - 12/2/2008
What's a Super-Senior Tranche? - Finance Blog - Felix Salmon - Market Movers
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I've written myself into a corner, now, and can't think of any way to get out of writing the promised blog entry on super-senior tranches. Especially when Kevin Drum asks so nicely. So here it is. Deep breath... By now, you understand how a synthetic bond can behave very much like a real bond. ...
portfolio.com - 11/30/2008
Understanding Synthetics - Finance Blog - Felix Salmon - Market Movers
— portfolio.com — Over the past few days, two very smart people have asked me about a passage in Michael... Lewis's cover story for Portfolio in which he talks about synthetic CDOs without actually using the term. They said that they didn't quite understand it, so I'm ... (more) Understanding Synthetics - Finance Blog - Felix Salmon - ...
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Blog Reactions

Matthew Yglesias:  Were Mistakes Made?

Angry Bear:  Watch the Parking Meters

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Blog Reactions

Were Mistakes Made?
Matthew Yglesias — Ezra Klein writes: I’ve spent part of the day reading about super senior tranches and synthetic bonds and all the rest, and on some level, I think we’re making this too complicated. I tend to agree with Ezra. Which is to say that though the specifics of how the super-senior tranche is created are very complicated, the underlying bet behind the super-senior tranche is very simple — it was a bet that any future housing price declines would be localized, and that it wasn’t possible for their to ...

Watch the Parking Meters
Angry Bear — ... aren't on the curbe to vehicles which aren't on the balance sheet in the bat of an eye. My honest reaction is "Huh wha why would Morgan Stanley put a super-senior tranche ino an off balance-sheet vehicle? I think I've been trying to learn about contemporary finance too fast. After the jump, I will use my very new knowledge of what the H a super senior tranche is to explain why I would guess that Morgan Stanley kept them on its balance sheet. Felix Salmon explained what the super senior tranche is (as did ??? in comments here) OK ...

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