The Motley Fool Discussion Boards

Previous Page

Fun & Games / Computer & Video Gamers

URL:  http://boards.fool.com/warning-massively-long-and-possibly-incoherent-27032286.aspx

Subject:  Re: Completely OT, but gotta ask Date:  9/26/2008  2:50 PM
Author:  JonBeer Number:  28359 of 36729

**WARNING MASSIVELY LONG AND POSSIBLY INCOHERENT**

Hey Rimpy,

In answer to your questions, yes I was very intimately involved in the whole "Structured Credit" market. I was a salesman at a major international bank up until November of 2007 when it became apparent to management that they'd lost a ton of money with some bad positions (only hundreds of millions, but given we were pretty small in this area that was plenty!). They moved quickly by basically firing the lot of us, so that was fun. I was actually having my best year ever, double my previous best, so was a bit of a shocker to be out on my ear with no bonus when I'd been expecting a very chunky one.

I should stress that we weren't really involved in all the dodgy mortgage business that was going on, we were simply working with Corporate debt - i.e. bonds companies issue to fund their operations. People like GE, Ford, Caterpilllar, JP Morgan, and European and global companies as well. Our most lucrative product was called a Synthetic CDO (Collateralised Debt Obligation) which was manufactured using CDS (Credit Default Swaps). Sorry for all the TLAs (Three letter acronyms!).

You can skip this paragraph if you want, it's pretty complicated and not necessary, but I think it gives a flavour of some of the stuff that was going on...Basically we would set up a special company to sell protection on maybe 125 different company's debts and collect a premium for doing so. It then