It all started with the mortgage lenders accepting billions of dollars of new mortgages from borrowers with questionable credit ratings … much of this risky debt was rolled into a multitude of collateralized debt obligation (CDO) instruments thus hiding the true source of the underlying debt … the rating services assigned most of this issue as investment grade despite the fact that the debt was mostly subprime in nature … the CDOs were sold to a wide-range of investors including major banks and other financial institutions … many of the investors turned to the bond insurers for insurance in order to protect thei... Read more »

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