the greed and need of CDOs market

--high yield is appealing --as the maket boomed, greed set in. By 2006, investment banks are willing to bend over backward if it helped win the business of arranging a deal. e.g banks used cheaper short-term commerical paper instead of long-term debt to fund the highest portion of CDO. This saved more money to be paid to equity investors. Some banks even step in if lenders suddenly snubbed the short-term debt - liquidity put. this has landed Citigroup with $25 billion, and bank of America with $15 bil of exposure to commercial paper backing CDOs. --another mechanism is "auction-rate note program" --those two mechanisms helped spread the CDO spain throughout the financial system.