Nov
26th
Mon
26th
Great Moments in Negotiation: The Liquidity Put
From Fortune.
Bolding is mine. Leaving aside the point that taking these CDOs off balance sheet was probably a sham transaction by accounting standards, why would you ever agree to this term? Heads you win; tails I lose.
At bottom, the countdown to both Prince’s exit and Citi’s November shocks began in that summer crisis period for the credit markets. Citi started then to have ominous dealings with CDOs that carried a “liquidity put.” Never heard of a liquidity put? Google will give you…
