Remember this old classic ? Feels kind of like the right time to re-run it.

'We are excited to announce the newest structured finance product - Constant Obligation Leveraged Originated Structured Oscillating Money Bridged Asset Guarantees, or Colostomy Bags.

Designed to accommodate the most sophisticated investment strategies, Colostomy Bags contain the equity tranches of Structured High Interest Taxable Derivatives, or SHIT, and are leveraged an infinite amount of times through the innovative use of derivatives.

'Its an actively managed, unlimited liability, open ended investment with no maturity date, which pays LIBOR plus 5,000 and has no correlation to traditional investments' said a spokesman for the firm who engineered the product. 'It's based on a CDO structure, but it's designed to default before the first coupon payment, which you'll agree has no correlation with stodgy traditional investments and is a perfect fit for portable alpha strategies'.

Following the default, each month more leverage is added to the structure to pay for the coupon and the Dealer's fees which are set at 80%. 

The Colostomy Bags carry a AAAA rating, based on the rating agencies opinion that they are even safer than Treasuries. 'You can't use traditional credit analysis to value these babies, no sir-ree', said a spokesman for a rating agency. But we've been tinkering with our model, which served us well for Enron and the Telecoms in '02, and our stress testing shows that the probability of loss in the senior tranche is close to zero'.

One investor, huddled high-up on a windowsill outside his office, said he remained optimistic about holding the Colostomy Bags, but was a bit concerned with the 95% decline in value on the first day they traded. 'We've taken a bit of a haircut on these, but I'm waiting to see the first servicer report, which should arrive in a few months. At first I was annoyed that the firm who sold them to me refused to make a market in them, but that makes my job easier since I'm not tempted to sell'.

The author of this item remains unknown. Our thanks to Dealbreaker for drawing it to our attention.

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