<<Most people knew those CDO tranches were not really AAA>>
... that may be, or not.
However, most banks did not know the toxic nature of the AAA and AA tranches, and their reserve is made up of such poison.
There might either be whholesale monetization of the poisoned reserve, like blood chage operation, or going-out-of-business discount of same 'asset' - messy operation, either way, especially when there will be plenty of other dire events happening to accompany such operations.
Do not forget, trade war, Pakistan war, Iran war, ... oh, and yes, Iraq war, ... rich valuation, rising money rates around the globe, dollar terminal spiral dance, ... and of course, genuine inflation, but also do not forget, as yet untested DERIVATIVES soon to be 'trial-ed' by cleansing fire.
No, bull bet at this juncture is not recommended. |
