From Subprimes to Global Meltdown

On June 22, 2007, the US investment bank Bear Stearns announced that two of its hedge funds, both heavily invested in so-called collateralized debt obligations (CDOs), had to be bailed out. While not exactly a surprise, this announcement caused considerable consternation in the financial markets, as it shed light on a new, highly complex, and opaque financial instrument that had come under considerable pressure in recent months. If Bear Stearns were obliged to liquidate its large portfolio of CDOs, the markets worried, there could be massive contagion affecting other investors exposed to CDOs. As it turned out, it was too late to save these two funds, both of which were declared bankrupt on July 31. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.