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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (75808)	6/21/2007 7:15:38 PM
From: Real Man	Read Replies (1) \| Respond to of 94695

Don't worry, they manage to sell the mortgage junk to Japanese housewives, packaged with some yielding loans, and they have a nice cozy relationship with Moody, SP, etc. They don't downgrade - the derivative junk can be "valued" like it has value. To models, of course, not to market. The question is who blinks first. I like Clint Eastwood. "Do you feel lucky, punk?" -g- But I agree with you, as soon as enough junk stops paying the principal amount (already happening, of course), the credit derivative pyramid supporting these markets becomes inherently unstable. Low VIX is part of it all, kind of like low spreads on junk - they will blow up together. But I guess they can always hide it for a while longer, or can they? -g- I expect a spectacular BK when it comes, who knows when -g- The 87 BK model says 55D top to crash. It is now reduced to 7, and the crash itself will be a lot faster. At least it will be over in 1 minute -ggg-