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Re-evaluating valuation

Subprime mortgage woes continue to send shudders through the markets. Rising delinquencies, rating downgrades and falling prices have left investors with huge losses on CDO of ABS investments. The losses have revealed discrepancies in the valuation of CDO of ABS tranches. By Jayne Jung

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"It's as if everyone's sitting around a table, staring at one another trying not to be the first to blink," says one New York-based credit strategist at a Wall Street firm. What he's describing is the tension among dealers in the collateralised debt obligation of asset-backed securities (CDO of ABSs) market. Since delinquencies in US subprime mortgages jumped alarmingly earlier this year, CDOs

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