In a replay of 2008, toxic subprime loans could worsen this financial crisis

MarketWatch/Satyajit Das/5-14-2020

“In April, Moody’s placed 20% of its rated collateralized loan obligations (CLO) (valued at around $22 billion) on review. The decision carried ominous echoes of 2008 and the Great Financial Crisis, when collateralized debt obligations (CDOs) proved problematic for the U.S. and global economies. In the current financial crisis, CLOs, which — despite industry protestations to the contrary — share many of same structural characteristics as CDOs, may cause similar problems.”

USAGOLD note:  Das warns us of complicated scenarios potentially rendering complicated results …… an elaborate and perhaps ill-omened debt structure erected in the corporate bond market.