Thursday, September 18, 2008

Repost of Leverage Related Entries

Below is the link to the posts I've previously entered related to subprime and the credit bubbles. They are timely, and getting lots of hits these days.

Morgan Stanley looks like they will not make it by end of weekend.

Posts Related to Housing, Banking, and the Credit Bubbles

AIG is the latest headline in the news, here is a link that explains the part of AIG's business that really got them into this mess, which was Credit Default Swaps (CDS) that AIG wrote for securities related to the structured finance products (collateralized debt obligations, etc.) that Wall Street created and traded. It's written by a personal friend and he's wicked smart, but does a great job of assessing the true risk of this "insurance" on these products. It's insurance, plain and simple that AIG wrote, and the worst case scenario has played out. The expected value of the "losses" that AIG thought could never occur, as remote as they seemed at the time, have come true. Their model is broken.

Also, below I've posted some links to the smart money, that actually have been calling the markets up to this point. It's in your best interest to check out, but they are highly technical.

John Hussman

Safe Haven Capital Preservation

Nouriel Roubini -- Go to his RGE webpage

The Float


Epoch Investments