Remember the CDO's that tanked the economy in 2008? Now they're back, in a more pernicious hidden form, as Collateralized Loan Obligations. Mortgages were somewhat visible, in that everyone could see the irrational rise in real estate prices, and witnessed episodes of unqualified borrowers walking the plank of hope.
Collaterized Loan Obligations take private commercial loans and bundle them up. Sounds like certain bundles contain a mix of quality:
"...collateralized loan obligations...bundle such leveraged debt into higher-rated securities that are pitched to more risk-averse investors."
What could go wrong? Meanwhile, party party party!
https://www.bloomberg.com/news/articles/2019-07-16/a-leveraged-loan-collapses-and-reveals-key-risk-in-credit-market
4/22/23: no apparent fallout yet from the above.
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