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Post by jeffolie on Jul 10, 2007 15:25:29 GMT -6
AA derivatives index got shot. The AAA index took a dramatic hit. These are supposedly immune to such waterfall actions. But reality is that the underlying bonds in these indexes were not rated properly. www.eurobondonline.com/abx-HE-AAA-06-2.Htm
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Post by unlawflcombatnt on Jul 10, 2007 15:43:52 GMT -6
Sounds like the "no contagion" propaganda has been officially proven wrong. Meanwhile, the BBBs have sunk like rocks. At least one segment of the BBBs is down below 50, from roughly 100 in January.
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Post by unlawflcombatnt on Jul 10, 2007 17:29:11 GMT -6
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Post by rjfliberal07 on Jul 11, 2007 0:17:09 GMT -6
That is one scary looking chart there. Unless you were shorting these companies during this fall.
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Post by jeffolie on Jul 12, 2007 16:02:43 GMT -6
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Post by jeffolie on Jul 14, 2007 13:13:28 GMT -6
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Post by unlawflcombatnt on Jul 14, 2007 23:14:31 GMT -6
One segment of the BBBs is below 49.
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Post by jeffolie on Jul 16, 2007 15:01:01 GMT -6
The AAA are down almost 5% AA are now down 12% and the A are down 31%.
The AAA being down that much is very significant. It indicates liquidation at the highest level.
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Post by jeffolie on Jul 16, 2007 15:08:05 GMT -6
Treasury bonds and notes did well today. I am going to guess this is a flight to the safety.
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Post by unlawflcombatnt on Jul 16, 2007 16:21:39 GMT -6
The worst BBBs are down to 45
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Post by jeffolie on Jul 16, 2007 17:02:35 GMT -6
This will eventually impare banks collateral. Under Basel II bank reserves for AAA paper is only 56 cents per $100.
A 5% decline such as today wipes out the bank.
Banks will be forced to raise capital or call loans.
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