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A Special Project: Inside the CDO Machine

Under the auspices of the Yale Program on Financial Stability’s Lessons Learned Oral History Project, Yale School of Management Fellow Steve Kasoff, a former equity partner and head of real estate and structured products investments at the Elliott Management Corp, has spearheaded a series of interviews with industry professionals focusing on collateralized debt obligations (CDOs), which the Financial Crisis Inquiry Commission (FCIC) found to be “some of the most toxic assets” during the Global Financial Crisis (GFC).

Because of his unique position as a former peer, Kasoff was able to speak at length with six individuals who were in key roles in the CDO business as it evolved during the GFC exploring developments from inside the industry. In addition, Kasoff contributed his own extensive interview.

Drawing upon these conversations, Kasoff has written a monograph, Anatomy of a Trade: The Making of a Subprime CDO, a detailed and insightful parable that illustrates the insiders’ points of view—the motives, structural maneuvering, and evolution of this market, which according to the FCIC, played a key role in spreading risk throughout the financial system and in accelerating the crisis. The monograph is engaging reading that makes the complicated topic accessible to a wide audience; all the Inside the CDO Machine project materials, including the full-length interviews, present new and valuable insights for industry professionals and regulators.

Access a combined pdf of the “Inside the CDO Machine” project documents here, or individually below.

The YPFS Lessons Learned Oral History Project: A Special Project: Inside the CDO Machine by Rosalind Z. Wiggins and Andrew Metrick 

Wall Street’s Subprime Debacle: Firsthand Accounts from Inside the CDO Machine by Matthew A. Lieber and Steven H. Kasoff

Anatomy of a Trade: The Making of a Subprime CDO by Steven H. Kasoff

Lessons Learned Interview Summaries
Full-length Lessons Learned Interviews

Kasoff was assisted on the “Inside the CDO Machine” project by Matt Lieber, one of our Lessons Learned interviewers.