S&P, Moody's Hide Rising Risk on $200 Billion of Mortgage Bonds

A

ASusilovic

http://www.bloomberg.com/apps/news?pid=20601087&sid=aN4sulHN19xc&refer=home

Rosner estimates that collateralized debt obligations, which have packaged thousands of bonds and derivatives into new securities, will lose $125 billion. Institutional Risk Analytics, a Hawthorne, California-based company that writes computer programs for the four biggest accounting firms, says 25 percent of the face value of CDOs is in jeopardy, or $250 billion.

Oh, oh....big trouble ahead ??:confused:
 
ah the infamous black swan finally appears.

this is going to be fantastic.

reverse leveraging and forced selling are two of the funniest things to watch in a market at the same time.

i would suggest to all you are about to watch history in the making here.

this will make the savings/loans crisis and the ltcm debacle look like a walk in the park.

if people want to make money out of this trade quite simply buy the credit spreads.

that is what i have done.
 
The Real Money columnist confirms the "80 pt markdown story " today.

Also, a contact spoke to an exchange official who confirmed same.

There is not enough equity in the CDO's to cover the debits; it rolls to equities, and everything else.

What a nice job the regulators and politicians did on this one. Don't say we didn't warn them.
 
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