WTF is going on in the ABX Markets?
Its one thing when we see that the BBB- bonds -- the junkiest sub-prime crap in the Residential Mortgage Backed Securities (RMBS) universe -- getting shellacked due to foreclosures.
But today, we see that the AA and even the AAA are getting whacked. It looks like either a fund is getting liquidated across all asset qualities -- or someone is panicking.
UPDATE: July 16, 2007 7:28pm
On the train home, I bump into a friend from UBS, who reminds me that triple AAAs contains up to 8% toxic sludge, while the double AAs contain up to 12%.
As we mentioned this morning in the Beyond the 'Wall of Worry,' perhaps the focus has been in the wrong place -- not the low quality junk, but the supposed AAA stuff . . .
Very ominous charts (all via Markit):
Maybe there is a problem at Bear Stearns.
Regardless, looks like another hardly efficient market . . .
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» The Big Picture | WTF is going on in the ABX Markets? from The Capitalist Resistance
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I mean its only 5% -- but its AAA fer cryin out loud!
Posted by: Barry Ritholtz | Jul 16, 2007 4:59:32 PM
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