Not unlike a brand new car, a CDO's price plummets as soon as it leaves the lot, its value depreciating instantly in a thin secondary market. To make matters worse, dealers have been marking-to-market CDOs at unprecedentedly wide levels on average versus purchase price - to the chagrin of investors, sources say.

While this controversy was around years before the Sept. 11 attacks, the Street has become more conservative in its financial reporting and subsequently on the marks or bids made on clients' portfolios.

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