Thursday, July 31, 2008

Super Seniors to the rescue!

Calculated Risk (one of the best financial blogs out there) writes about Merrill Lynch trying to dump a whole new batch of CDOs and other toxic crap on the market. They mention Merrill's new "Super Senior" CDOs, which I guess are better than regular seniors. I just love that this can exist. What is the value of a senior note when you can just invent super seniors on top of them? It reminds me of fourth grade when you would try to end a testy argument over who had the most of something by pulling out "infinity plus one!" only to find yourself in a war of attrittion which eventually ends in someone claiming to have "infinity plus infinity!" of said object. In fact, I can draw a lot of parellels between fourth grade boys and bulge-bracket bankers.

If you look for my best friend Nemo in the comments of that post, you'll find him asking "Anybody else read "super senior" and picture an elderly guy in a wheelchair with a cape?"

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