have CDO sales stopped?

[sniglet]

Does anyone know if the CDO market has been functioning at all in the last week? The news about the Bear Stearns problems make it sound as if no CDOs are being traded at all right now since everyone is scared to see what the real market prices are.

But that wouldn't make sense. If CDOs weren't trading at all, that would mean that much of the structured finance industry would have ground to a halt (i.e. because CDOs are required to grease the wheels of many deals), but I haven't heard any stories about such a general lending collapse.

Or maybe it's only that some classes of CDOs aren't trading but others are?

[Jazen]

I think it's a huge nobody knows issue, due to lack of transparency.

[sniglet]

[TJ_98370]

I Googled "CDO sales" and this was one of the hits:



June 26 (Bloomberg) -- Planned sales of collateralized debt obligations backed mainly by subprime mortgages are drying up and may shut down amid concerns about the integrity of the market following the near collapse of hedge funds run by Bear Stearns Cos., JPMorgan Chase & Co. said.

The amount of U.S. high-grade, structured finance CDOs that are being offered to investors has plunged to $3 billion, from $20 billion a month ago, JPMorgan said in a report dated yesterday....
...

[deejayoh]