Jorge Piedrahita

How Much Lower Can the ABX Go?

A few additional thoughts are:
-- Rating agencies are always slow to recognize the deterioration of any credit (I bet this is one of those cases)
-- Market levels are an unbiased predictor of a paper's rating. In this case, it is basically saying that the AAA paper is in reality a single A.
-- Mark-to-market losses are just starting to hit, when they do then risk managers and others take control of the situation with a liquidation at any level following. We are far from that yet.