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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (41415)	9/12/2005 10:29:38 PM
From: mishedlo	Respond to of 110194

Mish, I admire your ability to merge all those articles together in a cohesive manner. Now try this one. investorrelations.ncen.com Look at the 2 recent 8Ks. I am not sure exactly how those agreements are ammended. May be the credit event has already happened and we don't know about it yet. These originators are holding more and more loans in their portfolio. Sooner or later, their credit is going to be used up if they can't sell these loans. They would be forced to raise the coupon but that would chase away all the customers, since they would neither have to equity nor the incentive to refi anymore. I think all the subprimers have credit facilities that are renewed every year. If any of them are not renewed, that will be the starting gun for the credit event. Ramsey Thanks. Bear in mind that I most often need someone to point me where to look. You and ILD and Russ and many others have told me many times where to look. Yes, I do think I can put together pieces of the puzzle pretty good but I am not very good at coming up with the pieces. I will offer you this. Yes, it is actually very possible that the credit even has already occurred or is in process of occurring now and no one knows about it. I discussed this possibility with Heinz not too long ago, and since I do not think I ever mentioned it, I think it is extremely clever of you to suggest that. It is my understanding that LTCM blew up weeks before the ripple affect was widely known, and yes that could be the point of the FED callibg a meeting on derrivatives with JPM and C and whoever else. That said, even though I think it is POSSIBLE that it happened pre-Katrina, I do not think it is likely. It appears that even more suckers have to be sucked in first. But who knows. Perhaps Katrina is just right now pushing us over the edge and we do not know for weeks. That seems far more likely to me than anything pre-Katrina but there is no way to know until after. Can you give me a specific thing to look at in those links because I sometimes need a flare gun in the face to sort thru the darkness of my own ignorance? Thanks Mish

To: Ramsey Su who wrote (41415)	9/13/2005 2:31:58 AM
From: mishedlo	Respond to of 110194

brokeruniverse.com

To: Ramsey Su who wrote (41415)	9/13/2005 1:16:23 PM
From: mishedlo	Respond to of 110194

Message 21697605 Reply from Heinz to the above... well, i would agree that they would attempt to cover up an actual credit/derivatives event if possible, in order to not spook the markets and give them time to find a sub rosa bail-out solution before anybody becomes wise to what has happened. in fact, it is quite likely that such sub rosa bailouts have happened already before . be that as it may, the situation in credit and derivatives land is best described as an accident waiting to happen imo. the entire enchilada seems poised on the edge of an abyss, and i'm very surprised that the markets have so far failed to discount the possibility that Katrina actually might provide the final shove to push things over the edge. there's great reliance on 'just-in-time' short term financing everywhere one looks, based on the experience of recent years that has taught market participants that there will always be ample liquidity and that disruptions to same are usually short-lived. thus we have the current situation of vastly mispriced risk and complacency , both of which are very inappropriate to the actual situation. imo trouble for subprime mortgage originators is apt to surface soon, especially if the recent trends in falling median prices and inventory build in res. real estate continue (and why wouldn't they continue).