Floyd Norris does a very nice job outlining the story of CDOs, SIVs, and other forms of creative financing that have led to losses in the tens of billions of dollars at some of the world's largest financial institutions. I'm not sure about his conclusion: that the Fed will engineer a large spread (high long-term interest rates and low short-term rates) to allow the banks to rebuild their balance sheets. This is not so easily done, but the rest of the story is on the money and makes painful reading (what do these guys get paid big bucks for?).
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