Collateralized debt obligations (CDOs) are investment instruments that are partially to blame for the mortgage crisis. What, you say you don't know what CDOs are or why they matter? Don't worry, almost no one does (maybe that's part of the problem). But not to worry, Marketplace Senior Editor Paddy Hirsch goes analog to simplify and visualize the problem at the whiteboard in a 6-minute presentation he calls Financial Crisis 101: CDOs explained. I should have paid more attention in my finance class a million years ago; I had to watch this presentation twice, but you'll surely get it the first time. Nothing simplifies and illuminates like a good teacher at the whiteboard (and you don't even have to be an artist). I love whiteboards. Checkout the presentation below. For more information and more simplification of what CDOs are, listen to the Marketplace Radio broadcast and see the transcripts here. Enjoy.
Here's the money quote at the end after a good (albeit very simple) explanation at the whiteboard: "The fact is, we're in a mess of our own making." Indeed.
H/T Adam R.