re: Just finished reading 'The Big Short' - questions

quote:

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I'm not sure what you mean by repackaging CDSs though. Are you wondering why they didn't offer an infinite amount of synthetic CDOs to be purchased by a relatively small number of investors (at the time)?

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Yes. The italicized sentence in particular is interesting to me:

The details were complicated, but the gist of this new money machine was not: It turned a lot of dicey loans into a pile of bonds, most of which were triple-A-rated, then it took the lowest-rated of the remaining bonds and turned most of those into triple-A CDOs. And then--because it could not extend home loans fast enough to create a sufficient number of lower-rated bonds--it used credit default swaps to replicate the very worst of the existing bonds, many times over.

So did the IBs game the system as much as they could? Could they have created an even bigger mess?