Illustration: Sarah Grillo/Axios

Left for dead in the aftermath of the global financial crisis, collateralized debt obligations (CDOs), one of the most notorious agents in the collapse of the financial system, are starting to gain favor again on Wall Street.

The big picture: Synthetic CDOs, seen as particularly risky, both for a bank's balance sheet and its reputation, also have seen a wave of fresh investment this year as investors look for ways to bet on corporate defaults and generate yield.

Details: Christopher Whittall of International Financing Review reports, "Trading volumes in synthetic collateralized debt obligations linked to credit indexes are up 40% this year, according to JP Morgan, after topping US$200bn in 2018 on the back of three years of double-digit growth. Meanwhile, analysts predict more than US$100bn in sales of bespoke synthetic CDOs in 2019 following an estimated US$80bn of issuance last year."

What's happening: Since 2009, after the Fed began its quantitative easing program, investors have piled out of bonds and into riskier assets in an effort to replicate returns of the past. Portfolio managers have tried buying stock options, investing in hedge funds, private equity and alternatives. CDOs look to be the latest pick.

  • Whittal reports that Citigroup, which was already investing in CDOs, has hired more traders to focus on the synthetic market in recent months. Deutsche Bank and Barclays look to be increasing their presences as well.
  • "We provide solutions for our clients as there is a need in the market from investors for the yield and exposure from synthetics that is not available in other markets," a Citigroup representative who was not authorized to speak publicly on the matter tells Axios.

Yes, but: Today's synthetic CDOs are largely free from exposure to subprime mortgages, which drove much of the carnage in the crisis. Most are credit-default swaps on European and U.S. companies, and amount to bets on whether corporate defaults will increase in the near future.

  • The amount of CDOs being traded also is much smaller than it was during the crisis, and is even a few hundred million dollars below the total seen in 2011.

The bottom line: "We are still at such a low level that this is not a worry at this stage," Deutsche Bank chief economist Torsten Slok tells Axios, "but we are indeed monitoring it carefully given the role synthetic CDOs played during the crisis."

Go deeper: Debt is suddenly hot

Go deeper

Exclusive: The N.Y. Times doubles down on TV and film ambitions

Illustration: Aïda Amer/Axios

One of the country's oldest and most established media companies is starting to look more like a Hollywood studio than a traditional newspaper.

Driving the news: The New York Times has 10 scripted TV show projects in development, as well as 3 feature documentaries coming out this year and several other documentary projects in development and production, executives tell Axios.

Electric vehicle companies are reeling in cash without producing a car

Illustration: Sarah Grillo/Axios

These are heady days for electric vehicle companies, with a lack of actual car production becoming a popular norm.

Why it matters: The capital infusion is the latest in a busy stretch of deals and market moves that suggest private investors and equity markets see big potential in technologies that now represent a tiny slice of the global vehicle fleet.

Updated 1 hour ago - Politics & Policy

Federal government carries out first execution since 2003

Lethal injection facility in San Quentin, California. Photo: California Department of Corrections and Rehabilitation via Getty Images

The first execution carried out by the federal government since 2003 took place on Tuesday at a federal prison in Indiana after an early-morning Supreme Court decision allowed it to move forward, the Washington Post reports.

The big picture: A lower court had delayed the execution, saying inmates had provided evidence the government's plan to carry out executions using lethal injections "poses an unconstitutionally significant risk of serious pain."