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hhmmm... as BSC lawsuit talk swirls...rating agency stocks...mco and mhp are getting pounded what a septic tank

the Fed is toothless since you can borrow money in Japan for 0.5% and lend it to New Zealand at 8.5% where's the Fed. in all this unless they (at some point) will really have to compete for the flow of funds........

btw, I asked my money market mutual fund if any of the A to AAA paper in the fund was of the CDO variety and they wouldn't give me an answer... so if a lot of the A paper is really D paper, the money market funds will be forced to dump massive amounts onto the market or what there is left...

Moody's and S&P are in enough hot water to let it go this long, CDOs tranches are everything from AAA rated paper to BBB- and the losses are pinned on the BBB- stuff first and then the losses move up the rating scale.... who in the world allowed subprime CDOs to be rated AAA? give you...

I think the reverse will happen...like when the Fed. issued Brady bonds to bail out S. America.... they (the Fed.) will issue Benny Bonds to bail out the banks...you'll swap your radioactive CDO's for a bucket of 30 year Benny Bonds which you can then sell for newly printed US...

we're in worse shape than in '29..... let's say you need to dump some BBB- paper and no one bids.... what's it worth?

watch the US dollar index....a break below 81 (sep) should get some attention

2007 BBB- paper is still getting pounded ABX-HE-BBB- 07-1

you can borrow 2 million against it and call yourself Blackstone

a decent read and analysis of it all http://www.merkfund.com/merk-perspective/insights/2007-06-25.html

what's rather amazing is a lot of this junk paper sits inside bundled products that carry a AAA rating by Moody's............ so watch Moody's next week to see if some of this starts to circle the bowl....... if Moody's doesn't start downgrading big, then the fix is in..............

a trillion here... a trillion there....after awhile it starts to add up to a taxpayer bailout........

just like the summer of '87, credit spreads continue to widen and liquidity is starting to dry up........... back then, junk bonds began to crater as the Fed. raised rates, only this time the credit market junk is levered 15 to 1.... this aint gonna get fixed anytime soon, and when it...

of course there's no problem with housing, it's all in your mind....

my take on this is some of these funds had 500 million in capital but levered that to 20 billion in paper......that was on the books at par......... trouble is, what pricing discovery is there when you try to auction off the stuff and nobody responds.......... so liquidity dries up and...

naked selling is nuts..... just before the '87 crash, Merrill was recommending sale of naked IBM puts... 20 points OTM.....calling it "found money" IBM dropped 49 points the day of.......... even if your trade call is right....you could be chewed alive by increased vols...

agreed...Goldman doesn't trade at $228 a share by making big mistakes.... although the Central Bank of China could have fired a shot across the bow to say that they control rates, not Uncle Ben

Central Banks dont have to "mark-to-market" so they dont have to show profit and loss on debt holdings..... think it over...China dumps a few treasuries and the Dollar rises in relation to the yuan....thereby reducing the pressure for China to revalue in the open market..... China used the...

now you know why they quit reporting it (officially)

go here for more stuff http://www.nowandfutures.com/key_stats.html