UBS worker calls CDO 'vomit' in e-mail

A UBS AG employee referred to asset-backed securities sold by the Swiss bank as "vomit" in an internal e-mail in 2007, according to a fraud lawsuit brought by Pursuit Partners LLC, a Stamford-based hedge fund.

[BOHICA]

Okay, this story comes from Bloomberg and it's expected that THEIR readers understand financial jargon, but now the story is in a general circulation newspaper. Did the Advocate editor miss the explanation of what is a CDO? I presume the "O" is obligation and if it follows suit, the "CD" might be Certificate of Deposit but that doesn't make any sense. Please sort out.

[Frank]

CDO is short for Collateralized Debt Obligation. Simply put, it's a security backed by a pool of repackaged bonds. A CDO can hide the fact that the bonds backing it are very risky or low rate. CDOs can indeed be crap, junk or vomit.

[Nah Really]

The European bankers at UBS are conducting more shady business in our country? Shocker!

[Time Is Now]

No more Wall Street fraud! Put this bank and its vomit out of business:

"UBS employees pitched the securities to Pursuit while they were in contact with credit-rating company Moody's Investors Services Inc., which was reviewing its investment grade ratings on the CDOs, according to court papers.

After meetings with Moody's, UBS employees became aware that the CDOs soon would turn into financial toxic waste, Blawie wrote.

Pursuit, which claims it lost $35.6 million, can pursue claims that UBS hid material non-public information that the debt instruments would lose their investment-grade rating, and that the loss of the rating would render their investments worthless, Blawie wrote."

[Jessica]

Can we get the names of the employees who pitched the worthless securities to Pursuit?

They should go to jail along with Madoff!

It's time to clean up America.