Tuesday, April 13, 2010

Magnetar!

Magnetar, 1/3 to 1/2 of the C.D.O.s sponsored by Magnetar. Smart really smart, buying the riskiest layers (traunch) of the C.D.O.
Credit Default Swap, if the C.D.O. fails the swap pays out. So by generating the risk Magnetar stood to make exponential returns on the risky value of the C.D.O in the first place. Amazing!
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