they'll buy the top tier AAA's thereby raising the tide of prices across the whole spectrum of CDO's. They hope hehe.
Wow, yeah, I think you're right. This is getting ridiculous, it's the foundation under the nation they're playing with! This is worse than communism.
"they'll buy the top tier AAA's" How are they going to figure out what's AAA unless each CDO is unbundled, the individual loans assessed, then averaged to reach some measurement of it's collective value? Seems the obfuscation that helped in the beginning would have to be unwound to see which ones are worth "saving".
if you haven't noticed most of the crap CDO's have now been re-rated(aka downgraded) by the rating agencies to reflect current conditions. SO whatever is still AAA is what they'll buy.
Why would an entity need to unload top tier AAA debt? And, why would they have to resort to the Super Fund in order to sell it?
This is not news at all. The banks have been at the table for a month now. The fact that they reached an agreement means, get the fuck out of the market before the fall of 08. This is just buying time for a recession, that could be the closes thing to a depression since 29. There will be plenty of Volitiliaty and great trading opportunities. There will be a window of time to get out of any Real Estate that you can not carry. Cash will be king but not as traditionaly defined. Cash will equal "Foriegn currency" not US dollars. And my bank wonders why am holding 90% foreign currency ( as I convert dollars) and 10% the cheap dollar. Every local fucking bank rep is clueless.
Monty Python explains backup fund: http://www.youtube.com/watch?v=grbSQ6O6kbs and here is the one about what happend to SIVs from August to today http://www.youtube.com/watch?v=9w2_1IX1L44
AAA CDO's are falling like a knife ABX index has them @ 70-80. an ut in this mkt will have the most impact. This is about cutting off the gangrene leg(crappy subprime infected CDO's) before it infects the whole body(entire bond market)