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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 (50606)	1/21/2006 12:36:14 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

I just added this to my last blog observation: I have now listened to a number of the financial company conference calls, and am not sure if I can stomach more, as they mostly utilize the same cover the warts modus operandi. Basically the playbook is to use the cover of the bankruptcy spike and hurricanes to write off more of these bad loans, and call it a one time "my dog ate the homework" exercise. Then if that doesn't do the trick, sell more poor loans into the Risklove marketplace. Often even this isn't enough to explain the rising delinquencies trend, so the purveyors cover their butts by alluding to "normal seasoning." Normal seasoning is a very straightforward concept at least to me. It's when the rob Peter to pay Paul spigot runs dry, and the debtor can't make his payments anymore. I would characterize the main GREBB hypothesis thusly: There is an underlying clear and present danger of deteriorating credit quality and housing Bubble dynamics, and much beyond the dog ate the homework excuses being offered. However, because Riskloves believe the hype, they just continue to buy the worst junk from the purveyors. I don't know exactly what happened if anything to credit spreads Friday, but the latest data the Fed has on it's site, shows BAA/1 year constant mat Treasury at a new low of 1.76%. idorfman.com Net net Riskloves are paying more and more for worsening quality, and just don't think that's sustainable. Because this is what is driving the crazy dig into a deeper hole Humpty Dumpty behavior, I think even a normal correction of this will have far reaching ramifications, and if it turns into a panic when the reality hits, GREBB will arrive in quick order.