See, every CDO trader already knew where things were trading, and could already derive all implied default rates already.
Information dissemination / transparency wasn't the issue. It was people's wrong model assumptions that were the issue...
Information dissemination / transparency wasn't the issue. It was people's wrong model assumptions that were the issue...
If the market was rational and had full insight into the performance of its securities, losses would have been no more than 20-35 cents on the dollar. That is enough to cause a major crisis, but it wouldn't trigger the paralysis of the global financial system.