Oh No, I Own a CMO
by Prof. Seth E. Lipner

I looked this month in my account
I like to check, to see the amount
But down was my portfolio
Because of a loss in a CMO!

Can it really be a CMO?
A "mortgage" is what it says below
It also says it is an IO
But what that means I just don’t know

Oh no, I own a CMO.
The losses just grow and grow
They say its rated triple A
But the prices drop now every day

I asked the broker what it was
But his answer was just full of fuzz
Good income was the justification
It was supposed to provide diversification

I heard the lenders went to town,
And now the stuff has gone way down
The mortgage brokers had a ball,
"No doc loans" for one and all !!!

Some are sub-prime, others Alt-A,
Lots of wealth has gone away
Defaults are up, the markets down
My hard earned green has turned to brown

So what the hell are these CMOs?
And why are they next to a bunch of zeros
I just got over the big tech wreck
And again my account has gone to heck

I heard they fired Stan O’Neil
But he, for sure, won’t miss a meal
For my retirement, well, I just don’t know
Because I own this CMO

********

©2008 Seth E. Lipner

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