Collateralized Debt Obligations

"Repackaging dubious loans into collateralized debt obligations creates a lot of perfectly safe, AAA assets that will never go bad."

The sentence is from Paul Krugman's column in today's NY Times. He's using it as an example of sophistry (which his dictionary defines as "a deliberately invalid argument displaying ingenuity in reasoning in the hope of deceiving someone"), though I'd think that putting the word "dubious" into the sentence makes it not sophistic. (The first half of Krugman's sentence describes what investment funds actually did, not what they said they were doing, right? So no one ever actually made the argument. Or did someone?)

But anyway, if I understood that sentence I'd understand how we got into the current financial situation (recession believed to be looming, is possibly here already), but I don't know enough about either economics or Wall Street to understand that sentence.

( Detailing my small knowledge and pointing at my vast ignorance )

So, anyway, what happened?

(By the way, Krugman's really good, even if he doesn't always have the space to explain everything. I read his blog whenever I get the chance.)

Top Singles 2008

This would be my P&J/Idolator singles list for 2008 if the vote were held today:

1. Gwen Stefani "Early Winter"
2. Robyn "Be Mine!"
3. Ashlee Simpson "Outta My Head"
4. Miranda Lambert "Gunpowder and Lead"

( What other songs would you consider eligible? )