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Abx... The Banks, The Funds, The Risk.

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Here it is.

4f493e9117529ef080778dd0495.png

From 90 to 40 in 6 months.

OK so the real problems began in June with the following...

ABX_Jun2607_Notice.pdf

We can see here that interest payment shortfalls began occurring in the following indicies from June.

June 2006

ABX.HE.BBB.06-1. (Asset Backed Swap, High yield, sub prime, 2006 issue 01)

GSAMP Trust

Structured Asset Investment Loan Trust

Soundview Home Loan Trust

Argent Secs Inc

Bear Stearns Asset Backed Securities

CWABS Asset-Backed Certificates Trust

ABX.HE.BBB-.06.1. (Asset Backed Swap, High yield, sub-prime, 2006 issue 01)

Argent Secs Inc

Bear Stearns Asset Backed Securities I Trust

GSAMP TRUST

Structured Asset Investment Loan Trust

Soundview Home Loan Trust

Morgan Stanley ABS Capital I Inc. Trust

Home Equity Asset Trust

CWABS Asset-Backed Certificates Trust

ABX.HE.BBB.06-2. (Asset Backed Swap, High yield, sub prime, 2006 issue 02)

J.P. MORGAN MORTGAGE ACQUISITION CORP

MERRILL LYNCH MORTGAGE INVESTORS TRUST MORTGAGE LOAN ASSET-BACKED CERTIFICATES

GSAMP TRUST

RAMP SERIES

ABX.HE.BBB-.06.2. (Asset Backed Swap, High yield, sub-prime, 2006 issue 02)

J.P. MORGAN MORTGAGE ACQUISITION CORP

MERRILL LYNCH MORTGAGE INVESTORS TRUST MORTGAGE LOAN ASSET-BACKED CERTIFICATES

GSAMP TRUST

HOME EQUITY ASSET TRUST

RAMP SERIES

Morgan Stanley ABS Capital I Inc

During July the loses became more exaggerated...

ABX_Jul2607_Notice.pdf

ABX.HE.BBB.06-1

Structured Asset Investment Loan Trust (again)

Soundview Home Loan Trust (again)

Argent Secs Inc (again)

ABX.HE.BBB-.06-1

Argent Secs Inc (again)

Bear Stearns Asset Backed Securities I Trust (again)

Structured Asset Investment Loan Trust (again)

Soundview Home Loan Trust (again)

Home Equity Asset Trust (again)

ABX.HE.BBB.06-2

GSAMP TRUST (again)

CARRINGTON MORTGAGE LOAN TRUST

ABX.HE.BBB-.06-2

J.P. MORGAN MORTGAGE ACQUISITION CORP (again)

MERRILL LYNCH MORTGAGE INVESTORS TRUST MORTGAGE LOAN ASSET-BACKED CERTIFICATES (again)

GSAMP TRUST (again)

Long Beach Mtg Ln Tr

Structured Asset Investment Loan Trust

CARRINGTON MORTGAGE LOAN TRUST

Morgan Stanley Capital I Inc (again)

Bear Stearns Asset Backed Securities I Trust

August has been far, far worse than this, with far greater loses. But these funds mentioned are now worthless and such announcements are still yet to hit the media.

There is a huge volume of equity that has been lost following the recent reappraisal of credit risk and these funds simply represent the most over leveraged, and over exposed funds that happened to be backed by depreciating assets. They were the most at risk.

There are much farther reaching repercussions following the new cost of credit, and following the behavior of central banks today to temporarily try and plug the hole with a liquidity injection without precedent . Whilst averting some of the short term risk from volatility due to very low trading volumes it pushes the long term risk to a new high.

Our capital markets are now extremely vulnerable to market shocks such as acts of terrorism.

This exactly how we are losing the war on terror. By diminishing all our savings and granting credit to deficit spending then mortgaging our futures to cover times of vulnerability. And handicapping ourselves in the future via increased debt burdens.

If there is another 9/11 event in the next 4-6 months I would not be in the slightest bit shocked. They can now see the belly of the beast.

ABX_Jul2607_Notice.pdf

ABX_Jun2607_Notice.pdf

Edited by ?...!

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The rate is one thing, but the real issue is the spread between the interest rate and the demands of the underwriters (the CDS market).

Underwriters are pushing the global economy into reverse. The big reserves around the world are simply not being offered to support the defaulters.

Which is a fairly obvious thing to happen, reserves do not accumulate under people who give capital away.

What spreading the risk around the world has done is to allow a risk to be held with greater efficiency.

It also makes emerging risk harder to spot. Imagine dropping a stone in a bath tube, you would notice right away. But someone throwing a stone into a big lake is harder to spot. The size of the pool does not stop things happening it makes them harder to spot, thus masking the risk of small events, the small events are however often a warning of something much larger to come.

This means large events, like we are seeing now are only visible early on to people with very sophisticated measuring techniques, meaning the majority of people are totally unaware anything is up, until the waves are lapping around their feet.

Currently the CDS market is as potent as the central banks when it comes to restricting or opening liquidity.

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they will just cut interest rates again, severely.

Maybe the fed will, can't see it happening in the UK unless the remit of the MPC is changed from keeping inflation in a range to 'bail us out of this credit mess'.

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The rate is one thing, but the real issue is the spread between the interest rate and the demands of the underwriters (the CDS market).

Underwriters are pushing the global economy into reverse. The big reserves around the world are simply not being offered to support the defaulters.

Which is a fairly obvious thing to happen, reserves do not accumulate under people who give capital away.

What spreading the risk around the world has done is to allow a risk to be held with greater efficiency.

It also makes emerging risk harder to spot. Imagine dropping a stone in a bath tube, you would notice right away. But someone throwing a stone into a big lake is harder to spot. The size of the pool does not stop things happening it makes them harder to spot, thus masking the risk of small events, the small events are however often a warning of something much larger to come.

This means large events, like we are seeing now are only visible early on to people with very sophisticated measuring techniques, meaning the majority of people are totally unaware anything is up, until the waves are lapping around their feet.

Currently the CDS market is as potent as the central banks when it comes to restricting or opening liquidity.

CDS prices used to be partly driven by interest rates and partly by default probabilities, now interest rates may end up being driven by CDS prices. Funny old world isn't it?

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Maybe the fed will, can't see it happening in the UK unless the remit of the MPC is changed from keeping inflation in a range to 'bail us out of this credit mess'.

Hey I think everyone is missing an important message here.

Lowering rates into a defaulting climate makes you very vulnerable to any kind of market shock. AKA terrorists. Too many people overestimate the threat and underestimate the intelligence of terrorists, they have not undertaken their cause light heartedly, they will have sympathetic people bearing knowledge and skills of every creed. They will be more than aware that if they can pull off a huge strike on par with 9/11 it will have a monumentally exaggerated impact on the financial world under the current market conditions. I only hope we have infiltrated them far enough to have men embedded in their cells to stop them before they act.

But I remain deeply aware that in a cave somewhere in an unruly Pakistan are a group of very wealthy men discussing how best to take advantage of volatility, fear and an aversion to risk in financial markets around the world. The last time we saw something in the markets on this scale they timed their actions all too well. What this retched little group tries next remains a real issue.

I think if the fed encourages risk they will invite a whole lot more risk than they want. And following 9/11 and what Greenspan did, I know the Fed make such decisions mindful of political climates.

I think they will watch poorer Americans losing their homes. Before bowing to voter pressure and inviting another 9/11.

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CDS prices used to be partly driven by interest rates and partly by default probabilities, now interest rates may end up being driven by CDS prices. Funny old world isn't it?

Too true.

It's because of the way risk is marketed so openly. A global credit market is much more accommodating of benign risk than a central bank. However heightened risk is a different game. The risk becomes unwanted, orphaned, and the lender of last resort has no choice but to come along and care for it. Which is where we seem to be today.

The ECB in particular is now holding rather more risk than it was last week, which of course is equivalent to lower rates today but means higher rates in the medium to long term. Thus accentuating the problem. Which is why we are seeing greater demand for treasuries.

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Guest vicmac64
If they cut rates in the US, the dollar will plummet.

And cutting rates does not force anyone to lend on the same lax terms as 1-2 months ago/

Credit is tightening, Gentlemen, as i have be warning for a long time

I agree - the dollar is finished - maybe a month to go at most - will Ron Paul be president yet??? hopefully so.

Unfortunately we are more likely to be slaves in the EU... Such is the integrity of our politicians (sorry i should have said 'masters')

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Here it is.

4f493e9117529ef080778dd0495.png

From 90 to 40 in 6 months.

OK so the real problems began in June with the following...

ABX_Jun2607_Notice.pdf

We can see here that interest payment shortfalls began occurring in the following indicies from June.

June 2006

ABX.HE.BBB.06-1. (Asset Backed Swap, High yield, sub prime, 2006 issue 01)

GSAMP Trust

Structured Asset Investment Loan Trust

Soundview Home Loan Trust

Argent Secs Inc

Bear Stearns Asset Backed Securities

CWABS Asset-Backed Certificates Trust

ABX.HE.BBB-.06.1. (Asset Backed Swap, High yield, sub-prime, 2006 issue 01)

Argent Secs Inc

Bear Stearns Asset Backed Securities I Trust

GSAMP TRUST

Structured Asset Investment Loan Trust

Soundview Home Loan Trust

Morgan Stanley ABS Capital I Inc. Trust

Home Equity Asset Trust

CWABS Asset-Backed Certificates Trust

ABX.HE.BBB.06-2. (Asset Backed Swap, High yield, sub prime, 2006 issue 02)

J.P. MORGAN MORTGAGE ACQUISITION CORP

MERRILL LYNCH MORTGAGE INVESTORS TRUST MORTGAGE LOAN ASSET-BACKED CERTIFICATES

GSAMP TRUST

RAMP SERIES

ABX.HE.BBB-.06.2. (Asset Backed Swap, High yield, sub-prime, 2006 issue 02)

J.P. MORGAN MORTGAGE ACQUISITION CORP

MERRILL LYNCH MORTGAGE INVESTORS TRUST MORTGAGE LOAN ASSET-BACKED CERTIFICATES

GSAMP TRUST

HOME EQUITY ASSET TRUST

RAMP SERIES

Morgan Stanley ABS Capital I Inc

During July the loses became more exaggerated...

ABX_Jul2607_Notice.pdf

ABX.HE.BBB.06-1

Structured Asset Investment Loan Trust (again)

Soundview Home Loan Trust (again)

Argent Secs Inc (again)

ABX.HE.BBB-.06-1

Argent Secs Inc (again)

Bear Stearns Asset Backed Securities I Trust (again)

Structured Asset Investment Loan Trust (again)

Soundview Home Loan Trust (again)

Home Equity Asset Trust (again)

ABX.HE.BBB.06-2

GSAMP TRUST (again)

CARRINGTON MORTGAGE LOAN TRUST

ABX.HE.BBB-.06-2

J.P. MORGAN MORTGAGE ACQUISITION CORP (again)

MERRILL LYNCH MORTGAGE INVESTORS TRUST MORTGAGE LOAN ASSET-BACKED CERTIFICATES (again)

GSAMP TRUST (again)

Long Beach Mtg Ln Tr

Structured Asset Investment Loan Trust

CARRINGTON MORTGAGE LOAN TRUST

Morgan Stanley Capital I Inc (again)

Bear Stearns Asset Backed Securities I Trust

August has been far, far worse than this, with far greater loses. But these funds mentioned are now worthless and such announcements are still yet to hit the media.

There is a huge volume of equity that has been lost following the recent reappraisal of credit risk and these funds simply represent the most over leveraged, and over exposed funds that happened to be backed by depreciating assets. They were the most at risk.

There are much farther reaching repercussions following the new cost of credit, and following the behavior of central banks today to temporarily try and plug the hole with a liquidity injection without precedent . Whilst averting some of the short term risk from volatility due to very low trading volumes it pushes the long term risk to a new high.

Our capital markets are now extremely vulnerable to market shocks such as acts of terrorism.

This exactly how we are losing the war on terror. By diminishing all our savings and granting credit to deficit spending then mortgaging our futures to cover times of vulnerability. And handicapping ourselves in the future via increased debt burdens.

If there is another 9/11 event in the next 4-6 months I would not be in the slightest bit shocked. They can now see the belly of the beast.

Fascinating and terrifying post. Some very big names there, possibly no longer holidaying in the Hamptons.

What scenarios could avoid economic collapse? I used to think that a contained rampant inflation of 10-15pct for a short period would help the debt problem, but contained is a new word these days, and might cause greater 'woes'.

Another scenario is a war on another front, say Iran.

I think it is probably too soon for China to 'buy' the USA but since the USA is their market they must have a strong vested interest in maintaining the economic health of their biggest customer. Jimmy Cayne must be thinking along these lines too or is it possible he has been sent with an informal agenda from the Fed/government to dig the USA out of the mire?

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Jimmy Cayne must be thinking along these lines too or is it possible he has been sent with an informal agenda from the Fed/government to dig the USA out of the mire?

Cayne is possibly too selfish to do that. Mind you, he refused commit to the LTCM bailout. Wall Street has not forgotten.

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Fascinating and terrifying post. Some very big names there, possibly no longer holidaying in the Hamptons.

What scenarios could avoid economic collapse? I used to think that a contained rampant inflation of 10-15pct for a short period would help the debt problem, but contained is a new word these days, and might cause greater 'woes'.

Another scenario is a war on another front, say Iran.

I think it is probably too soon for China to 'buy' the USA but since the USA is their market they must have a strong vested interest in maintaining the economic health of their biggest customer. Jimmy Cayne must be thinking along these lines too or is it possible he has been sent with an informal agenda from the Fed/government to dig the USA out of the mire?

No, no war.

The only helpful inflation, is wage inflation and Asia seem to have cornered it all. We in the West simply have to work harder, be more productive, save more, and spend less. We need to invest in expanding production capacity rather than investing in consumer goods.

Is that so unimaginable?

Edited by ?...!

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No, no war.

The only helpful inflation, is wage inflation and Asia seem to have cornered it all. We in the West simply have to work harder, be more productive, save more, and spend less. We need to invest in expanding production capacity rather than investing in consumer goods.

Is that so unimaginable?

Why on earth would we want to do that ? That would be sensible.

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Hey I think everyone is missing an important message here.

Lowering rates into a defaulting climate makes you very vulnerable to any kind of market shock. AKA terrorists. Too many people overestimate the threat and underestimate the intelligence of terrorists, they have not undertaken their cause light heartedly, they will have sympathetic people bearing knowledge and skills of every creed. They will be more than aware that if they can pull off a huge strike on par with 9/11 it will have a monumentally exaggerated impact on the financial world under the current market conditions. I only hope we have infiltrated them far enough to have men embedded in their cells to stop them before they act.

But I remain deeply aware that in a cave somewhere in an unruly Pakistan are a group of very wealthy men discussing how best to take advantage of volatility, fear and an aversion to risk in financial markets around the world. The last time we saw something in the markets on this scale they timed their actions all too well. What this retched little group tries next remains a real issue.

I think if the fed encourages risk they will invite a whole lot more risk than they want. And following 9/11 and what Greenspan did, I know the Fed make such decisions mindful of political climates.

I think they will watch poorer Americans losing their homes. Before bowing to voter pressure and inviting another 9/11.

so cave men are going to pull us down are they.

Bush had the towers pulled or the cave men were able to change the laws of physics on 9/11 and i think you will find that pakistan has it's own probloms to deal with just now.

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so cave men are going to pull us down are they.

Bush had the towers pulled or the cave men were able to change the laws of physics on 9/11 and i think you will find that pakistan has it's own probloms to deal with just now.

Say what? Are you mad?

Why the hell would George Bush have had the twin towers attacked?

Grow up.

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