Grandpa Buddy: Looks like you are in for some blood, toil, tears and sweat.

Scroll back up and you will see where I tried to fill in for you with a dissertation on
FNMA and FRDMAC.

And if Slade and LifeoftheMind are still reading: I am sure that some of the CDOs were knowingly fraudulent and went undetected.
I am equally sure that some Fannie and Freddie executives knowingly turned a blind eye to what they were buying in other cases.
Some of the sellers sold willingly, in other cases I get the impression that FAnnie and Freddie twisted arms to buy at a discount so they could re-sell at a premium. In cases like this the full panoply of human actions can be seen. The good, the bad and the indifferent.

As far as CDOs go, I prefer the kind of CDO that “Ginnie Mae” used to peddle and maybe still does. The “bonds” are directly serviced
by the mortages, thereby diffusing risk. And each certificate can be rated by what percentage of the principal is of what quality.

I just gotta relay to you all how P> J> O’Rourke defined bond ratings.

D-rated bond: Like money lent to a younger brother.

AAA-rated bond: Money lent to a younger brother by the Gambino family.