Comments on: How a CDO is like a rectangular bathtub A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Ginger Yellow Thu, 16 Jul 2009 11:02:00 +0000 I suppose that analogy works well to explain the importance of correlation (although the brownian motion aspect renders it a tad unintuitive). But it really doesn’t work to describe CDOs (or any securitisation) as a whole. In the analogy, it’s perfectly possible (though unlikely) for the equity boat to make it through unscathed while the senior boat gets sunk. That can’t happen in a CDO.