Hello monkeys,
Just finished watching the Big Short! (I know, I know, it's a bit late) By the end, they mentioned on how the big banks started a new thing called "Bespoke Tranche Opportunity" that are basically collateralized debt obligations that eventually led to the 2008 financial collapse.
Did a quick Google search about this "Bespoke Tranche Opportunity" and as expected, this article showed up...
Goldman Sachs Group Inc. is joining other banks in peddling something they’re referring to as a “bespoke tranche opportunity.” That’s essentially a CDO backed by single-name credit-default swaps, customized based on investors’ wishes. The pools of derivatives are cut into varying slices of risk that are sold to investors such as hedge funds.
Can anyone enlighten me on how these things work? And how popular are these things exactly..?
