One way to alleviate runs on the bank and similar liquidity crises is to take a bunch of putatively uncorrelated pools and mix them, which theoretically makes pool-specific liquidity concerns less likely to draw a pool’s liquidity to zero.https://twitter.com/ahcastor/status/1067066099475333120 …
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And a pooling strategy is no different than repackaging shit CDO assets and re-selling them. https://youtu.be/xbiDrzTd8fE?t=264 …
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I understand why those sound conceptually similar but I think this comparison is unfair to synthetic CDOs.
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