[turbo6bar]

OK, so CDOs could be considered bonds. Still, the problem isn't with the securities backed by actual mortgages. The issue is those "bonds" backed by no security (namely mortgages). The riskiest levels are worthless. The lowest tranches were profitable when mortgage default levels were very low. We're well past that point now.

tabdula, mortgage default levels are at record highs across the board (including prime mortgage pools). Analysts state we are only NOW reaching the wave of prime mortgage defaults. We're past the subprime pain. The problem only gets worse as housing depreciation lingers.