FOR MOST PEOPLE, July 11 2007 was probably just like any other day. But for Robert Morelli, then head of the syndicate desk at UBS in New York, it was the beginning of the end of his industry. "Put today in your calendar," he emailed his colleagues after rating agency Moody’s had put 184 CDO tranches on review for possible downgrade, explaining later that he sent the email because "today was essentially the beginning of the end of the CDO business... the bonds were getting downgraded, they were probably going to get downgraded further and we [UBS] were going to lose a lot of money".
But even in early 2011 the end of that CDO business is still some way off. The deals themselves have long since collapsed but the legal fallout still lingers. It is now nearly four years since the structured credit market began to unravel...
