what amplify credit crisis

--easy credit --structured products, CDO: a.the loss protection works only if thes securities in the CDOs are uncorrelated. But it does not work for mortgages b.seperation of underwriting and onwership c.cross-selling: CDOS of CDOs creates futher leverage d.mezzanine CDOs get high rating, sometimes 75% of a portfolio is rated AAA. --derivatives : it allows banks to create an unlimited number of CDOs linked to the sme MBS. UBS investment research estimate that CDOS sold CDS on around three times the actual face value of BBB-rated subprime bonds --by Mid-December, $153.5 bil in CDOs slices had been downgraded, according to Deutsche Bank. Beause banks owned the lion's share of the mezzanine CDOs, they bore the brunt of the losses.