Re: DOW Up 416.66 : Financial Groups' Correction?

On Tue, 11 Mar 2008 18:38:29 -0500, "John Galt"
<whoisjohngalt@[EMAIL PROTECTED]
> wrote:

>> Look at the column "collateral at risk" defined as percentage of a
>> bonds total collateral that is 90 days delinquent, foreclosed or
>> repossessed.
>>
>> Read this guy on the bonds and fed move. He's the best I think.
>> http://bigpicture.typepad.com/
>
>I get this. From 1983 to 1999, The default rate of any A or better bond
was 
>.1%. The worst rated junk, OTOH, defaulted at 12.2%.
>
>Everybody's guessing as to what the history books will show regarding
this 
>move. If those AAA's are really only A or better, then .1% will default,
and 
>the taxpayer gets hit with 200M, which is a rounding error for the
federal 
>goverment. If they're ALL BBB (and common sense tells you that what's in 
>there will be a range of stuff between AAA and BBB) the taxpayers get hit

>for 22B, which is a 1-year 1% increase in the upper tax quintile.
>
>There's no economic immolation here.


Look at that collateral at risk figure. You clearly didn't.