could anyone give me a quick overview how this works? does it work just like a regular ARS? Thanks in advance.
You: (ring ring) “Hello Goldman Sachs?” GS Trader: “Yes?” You: “I would like to buy some CDOs. I am willing to pay…” GS Trader: “SOLD!”
how would you structure something like that
im stuck valuing this thing, and I am not sure what to do with it…
Sorry to hijack but this is a little bit related in that there is no way to determine the value of these bonds. Statistics are just a guess with no precedent: I put in an offer on a house that’s about to be auctioned off on the courthouse steps. I offered them $525k. The sellers agreed. Now the banks have to agree to take less than they’re owed ($740k). The first mortgage is with Indymac (our lovely gov’t now) and it’s $600k. The second mortgage is with Citibank, $140k. So, if they take my offer then they have to pay the back taxes ($8k) and the realtor ($25k). As part of the proposed settlement, why did Indymac offer to give Citibank $30k? They could just take the whole thing if they wanted?
Because this isn’t a foreclosure and IndyMac didn’t want to foreclose on Citi. The only way that IndyMac gets the whole thing is if they successfully foreclose and Citi would be a defendant in that action.
Im_Awesome Wrote: ------------------------------------------------------- > could anyone give me a quick overview how this > works? does it work just like a regular ARS? > > > Thanks in advance. I think an auction rate security backed by a CDO is a regular ARS. It’s just backed by a CDO instead of something else. The first auction failures of ARS last summer were in ARS backed by CDO’s. The valuation thing depends on liquidity issues since they were supposed to be liquid and now aren’t. Whether or not the principal is really intact is another issue.
JoeyDVivre Wrote: ------------------------------------------------------- > Im_Awesome Wrote: > -------------------------------------------------- > ----- > > could anyone give me a quick overview how this > > works? does it work just like a regular ARS? > > > > > > Thanks in advance. > > > I think an auction rate security backed by a CDO > is a regular ARS. It’s just backed by a CDO > instead of something else. The first auction > failures of ARS last summer were in ARS backed by > CDO’s. The valuation thing depends on liquidity > issues since they were supposed to be liquid and > now aren’t. Whether or not the principal is > really intact is another issue. thats what i thought too. hopefully it is. Thanks JoeyDVivre