The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: patron_anejo_por_favor who wrote (84780)	8/10/2007 1:33:49 AM
From: Perspective	Read Replies (1) of 110194

Cash flow issues trigger BK. What actually is the event that triggers cash outflow for them? Aren't they only on the hook for the coupon stream? If so, even a ton of failed mortgages could take a while to bleed them dry. You could have $10B of failed mortgages and it would still take a long time to pay out even $1B against them. They don't have to mark-to-market like the hedge funds and CDOs, the just have to fill in missing cash flows. Don't get me wrong - they're a zero. But I'm not sure exactly when the market will mark them to reality. BC

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