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):
Triple A (AAA)
2007
2006
Double A (AA)
2007
2006
Maybe there is a problem at Bear Stearns.
Regardless, looks like another hardly efficient market . . .
Monday, July 16, 2007 | 04:55 PM | Permalink
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» Beyond the 'Wall of Worry' from The Big Picture
There is an interesting article in the Money Investing section of the WSJ this morning: What Could Topple Bulls' 'Wall of Worry'?. The wall of worry idea is that stocks can still flourish when people are nervous. Skeptics hold money on the sidelines. A... [Read More]
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» Bear Stearns doom andgloom from Phorgy Phynance
Over on Nuclear Phynance I predicted that today would be an interesting day
Posted July 8, 2007:
All I can add is that I think July 16 will be an interesting day
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» US FX Morning Note - Street Views from Econocator
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» The Big Picture | WTF is going on in the ABX Markets? from The Capitalist Resistance
Link: The Big Picture | WTF is going on in the ABX Markets?. WTF is going on in the ABX Markets?This is from about a month ago, but it is a bit on the ABX [Read More]
Tracked on Aug 1, 2007 7:58:05 PM
Comments
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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