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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Paul Kern who wrote (70716)9/30/2006 5:28:05 PM
From: jimmg  Read Replies (1) of 110194
 
I expect a lot of cross defaults on all of the OTC credit derivatives. A large proportion of these sellers likely don't have the capital to fund a credit crisis.

That means hedge funds are wiped out and the buyers of this insurance (pension funds, banks) take a big hit.

In my view, this would all be a healthy development longer term for our economy. We need a big credit destruction to rebalance our economy and get rooted in true economic wealth (i.e. the production of real goods).
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