English to Portuguese Other Finance (general)

The assumptions underlying quantitative models broke down when market liquidity proved vulnerable to portfolio insurance selling in 1987, just as they broke down for complex mortgage securities in 2007. Losses on highly-tranched Collateralized Bond Obligations (CBOs) constructed from junk bonds in the late 1980s were a precursor to losses on highly-tranched Collateralized Debt Obligations (CDOs) constructed in part from subprime loans in 2006 and 2007. The lesson of these prior crises is that a period of economic weakness often follows credit crunch episodes, but economic expansion tends to resume with a lag in response to easier monetary policy and often easier fiscal policy.