Well, it could be your part. Via Chris Hayes, here is a graphic from the Wall Street Journal laying out the deal and where a typical mortgage stood in the mix:
(Click to enlarge)
It's interesting to note that there is not really a causal relationship between this deal and the defaulting of this mortgage. In fact, there's almost no connection between what we think of as the "real" economy and these synthetic CDOs. However, the systemic problems with a deal of this nature -- repeated again and again at higher cost -- created the ravenous demand for securitized mortgages that in turn caused underwriting standards to plunge. And, of course, as the German government bailed out the dupe investor in the above example, the U.S. bailed many a similarly positioned entity.
-- Tim Fernholz
