“On a scorching summer day in lower Manhattan, a group of visitors from places like Belgium, Turkey and the U.S. eyed an unusual tourist attraction: a collateralized debt obligation.
“This intimate encounter with some confusing but important financial wizardry was part of the walking tour of the 2008 global crisis. It cost the tourists $50 in nonsynthetic cash.
“‘Where else in the world can you actually touch a toxic asset?’ asked Andrew Luan, former Deutsche Bank AG trader and founder of ‘The Wall Street Experience’ tour company.
“A CDO is a security backed by a pool of bonds. If that isn’t complicated enough, some of the most toxic financial products were actually ‘synthetic’ CDOs, in which Wall Street concocted securities that behaved like bonds. When the housing market collapsed, so did real and synthetic CDOs, pressuring markets around the world.”
Read full Wall Street Journal article here