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Welcome to the major leagues of debt. Collateralized debt obligations, almost always referred to as a CDOs, are horrendously
complicated deals that often leave anyone without a MBA wondering what was put into these CDOs.
The first thing to
understand about bonds, (aka debt) is that bonds are often backed by something else. Think about your home mortgage. If you
don't pay your mortgage, the bank can take the house. You end up homeless, and the bank sells the house to pay off the rest
of that mortgage. There is something "backing" that mortgage; something lender can fall back on, if you don't pay your bills
like a good human being. That's called collateral.
CDOs are one flavor of an entire sector of investing called structured
finance, and they are also backed. CDOs, in the simplest concept, are just bonds backed by something else. In most cases,
a CDO is backed by a collection of various types of debt. CDOs can be home mortgages, or other types of debt like credit cards,
auto loans, and personal loans. Most of these types of debt are usually considered a bit more risky and they don't have the
backing that a home loan does. So, if you think it through, you can imagine that CDOs are usually considered a risky investment.
To take a step further, understand that CDOs have multiple flavors within each CDO. These flavors are called tranches. If you've taken French, you might recognize the word, it means "slice" or "portion." Each slice of that CDO you invest in is a little different and carries different amounts of risk.
You could invest in the lowest risk tranche of the CDO, which would
provide you lower risk. But, you don't get a good return on that investment. Or, you can be the heroic adventurer of bonds
and invest in the lowest-grade tranche of the CDO. You'll make an amazing return, but if the economy even looks at you wrong,
you might lose the entire investment.
CDOs aren¿t easy, and are almost always invested in by mutual funds, insurance
companies and hedge funds. As an individual investor, you will probably not come across a CDO you can participate in.
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Wednesday, July 09, 2008
'Big Relief From the Big Easy' Headed to Cedar Rapids Hospital
Comtex
CEDAR RAPIDS, Iowa, July 9, 2008 /PRNewswire via COMTEX/ ----Concerned Emergency Department (ED) staffers from two New Orleans hospitals that operated during Hurricane Katrina will caravan to Iowa this week to aid hospital workers in Cedar Rapids impacted by the Iowa Flood of 2008.
Nicknamed, "Big Relief from the Big Easy," the operation was organized by the Emergency Nurses Association in the New Orleans area. Emergency nurses from five different hospitals in the area will collect diapers, toiletries, food, linens, pet care items and money this week for delivery to 134 St. Luke's Hospital employees displaced from their homes by the flood in Cedar Rapids on June 11-13.
Cheryl Carter, Emergency Department director at East Jefferson General Hospital, Metairie, La., lost her home in the Katrina disaster. She is one of the Emergency Nursing Association members that organized the Iowa effort. As she prepared to make the trip to Cedar Rapids, Carter said that the effort evolved out of empathy for the Iowa flood victims and a desire to pay someone back for the help New Orleans nurses received after Katrina.
"About half of our hospital employees lost their homes in Katrina," Carter said. "When we first heard about the Iowa floods, all of us had flashbacks. We know how your whole life can change in a minute. The cost of losing your home and starting over is amazing. So we decided we had to do something -- we all have a lot of paying back to do."
Carter and ED staffers from East Jefferson General Hospital and the West Jefferson Medical Center will load up the donations and drive from New Orleans to Cedar Rapids, arriving Friday evening, July 11, to deliver the supplies to St. Luke's Resource Center for distribution. On Saturday, July 12, they plan to prepare the traditional Cajun dish, jambalaya, and serve up to 200 displaced hospital employees and other personnel at the St. Luke's Hospital campus.
Only three New Orleans hospitals were able to operate during Katrina, a Category 5 hurricane that struck the Gulf area in 2005. West Jefferson Medical Center and East Jefferson General Hospital were two of those three hospitals. Coincidentally, St. Luke's Hospital was the only hospital able to remain open in Cedar Rapids during the recent Iowa flood, taking in patients from Mercy Medical Center, Cedar Rapids, which was forced to close.
In the days following the June flooding, St. Luke's Hospital went into capacity management mode, accommodating up to 100 more patients per day. During the floods, St. Luke's Emergency Room saw their number of patients double. To help with the increase in patients, staffers from hospitals in the Iowa Health System network pitched in to help at St. Luke's in Cedar Rapids.
"We'll be taking tissues for our tears on the trip, because we know the emotions of Katrina will be flooding back," said Carter. "From Katrina, we know that recovery doesn't happen in the first few weeks after a disaster like this. By donating things that made us feel better after Katrina, we can help others feel better after their flood. We want to let them know that we care about them."
Others who wish to donate may call the St. Luke's Health Care Foundation at 319-369-7716 or visit http://www.stlukescr.org/foundation.
SOURCE Concerned Emergency Department
Copyright (C) 2008 PR Newswire. All rights reserved
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