Neil Unmack

Neil Unmack’s Profile

Why Girls Aloud Don’t Sell CDOs

July 13, 2009

Sarah Harding, a member of the highly-successful all-female pop act `Girls Aloud’ is to make her acting debut in a UK television drama on the credit crisis tomorrow night (“Freefall”, BBC2). La Harding plays the girlfriend of a dodgy mortgage broker, The BBC website tells us.
This isn’t Harding’s first brush with the world of mortgage securitization and CDOs. In 2006 she performed along with the rest of Girls Aloud for a group of bankers and investors at a plush cocktail party at the annual asset-backed securities industry conference in Barcelona, laid on by one of the leading securitization banks.
The girls did their best to put on a good show, but they never quite got their groove on. Perhaps they were used to a younger, more adulatory crowd. Some bankers danced; many drew back from the cramped dance floor to schmooze clients. The rest of the crowd stood and took photos with their mobile phones. How uncool.
Since then the fortunes of the securitization industry and Girls Aloud have moved in opposite directions. The ABS market is broken, and the heydays of the Barcelona conference won’t return any time soon. Some investors have failed, others have been left nursing losses as their holdings of CDOs and other exotica they bought tanked. Asset-backed debt has proven so volatile in price and unstable in rating that many fund managers simply won’t touch it anymore, despite the crazy-high yields on offer.
Girls Aloud, meanwhile, have gone from strength to strength, largely by knowing their fans, giving them what they want, and making sure they keep coming back for more. Maybe there’s a lesson there somewhere.