Krugman Equates CDO Market To ‘90s Stock Bubble

  • 03 Jul 2007
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In a recent column in The New York Times’ opinion section, economist Paul Krugman parallels the current state of the collateralized debt obligation market with Enron-style accounting practices of the 1990’s stock bubble. Krugman argues that the ratings agencies, Standard & Poor’s, Moody’s Investors Service and Fitch Ratings have been approving risky CDOs with high ratings even when the bonds don’t deserve such ratings.

Krugman says that the price of a basket of loans within the $800 billion subprime mortgage market has lost about 40% of its value since January. He also estimates that losses in the CDO market may range between $125-250 billion and cites some analysts as believing that a wave of problems in the CDO market will further dampen housing prices.

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  • 03 Jul 2007

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 1,505.59 4 20.86%
2 SG Corporate & Investment Banking 1,292.64 1 17.91%
2 Rabobank 1,292.64 1 17.91%
4 Wells Fargo Securities 760.56 2 10.54%
5 BNP Paribas 598.25 2 8.29%