As ABC TV’s The 7:30 Report investigates Gosford Council’s risky investment strategy, they call on Associate Professor Steve Keen to explain CDO or collateralised debt obligation.
He reveals why the ‘safe bet’ investment is a faulty system with a high failure rate.
What actually happens is, rather than 20 per cent failing and the 80 per cent being safe and therefore triple A, up to 80 per cent can fail. And that’s what’s bringing the system down now.
Read the full transcript here.