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Wednesday, April 21, 2010

Why the Abacus investors weren’t speculators | Analysis & Opinion |

The argument that the CDO's in question had two counterparties , a long and a short does not hold water.
The two investors thought that they were making very different bets. The longs thought they were buying bonds, and highly rated bonds. They did not think that they were betting on the housing market.
The shorts knew that they were betting on the housing market.

Why the Abacus investors weren’t speculators | Analysis & Opinion |

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