Wednesday, Jun 20, 2007
Blood running in the streets
Forexfactory: Bear Stern Sub-Prime Hedge Fund In Trouble-Update
It's also the kind of thing that could light the fuse of a panic, not so much becasue of the loss but for the possible liquidity implications.$Billions of these sub-prime backed instruments are all over the street. If Bear's paper is seized and sold at a deep discount, everyone else's paper will get their price discounted as well, triggering more margin calls.
It's basically a situation where all of a sudden-a lot of people are going to be holding paper that will be rapidly depreciating, with no ready buyers standing in line.
Posted by out of control speculators @ 06:40 PM (141 views) Add Comment
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