> The only reason anyone ever bought a CDO is
> because they believed it would pay off. A triple-A rating won't help
> you if the security ends up defaulting anyway. And they all
> understood that CDOs would not pay off if national house prices fell.
> They bought the CDOs because - just like everyone else - they
> believed house prices wouldn't fall.
Vapid. The belief was manufactured. In bubbles the knowledge that it will fail prevails. Maintaining the illusion that it will not fail before one can get out is essential to bubble promotion. This was facilitated by the liquidity of securitization and proselytizing that "everyone else [...] believed house proces wouldn't fail".