's to place unusually large negative bets that were not mainly for hedging purposes".Authors Bethany McLean and Joe Nocera stated that "the firm's later insistence that it was merely a 'market maker' in these transactions - implying that it had no stake in the economic performance of the securities it was selling to clients - became less true over time"-

The investments were called synthetic CDOs because unlike regular collateralized debt obligations, the principal and interest they paid out came not from mortgages or other loans, but from premiums to pay for insurance against mortgage defaults - the insurance known as "credit default swaps".