Boom.

[solarbird]

(Hang on, hang on, tight)

Boom. Boom (first story in comments, but also the column). Boom. Boom.

This class of insurers form the core of the hedge funds game. If they can't pay out, the entire game collapses. We're talking trillions, plural, of dollars here in full playout.

ETA: 173,022 MBIA-Insured Issues on Rating Watch Negative. That's bad.
ETA2: Fitch Places 137,893 Ambac-Insured Issues on Rating Watch Negative. That's bad too.

Comments

[dustin-00.livejournal.com]

$80,000,000,000 in subprime faults. How many homes is that?

The October 2004 average home prices was $264,000.

That's 300,000 families out of their homes.

Wow.

And the banks are getting stuck with them (http://www.modbee.com/local/story/152921.html). I remember NPR talking about how after a few months of nobody living in the home, looters will break out the windows, strip out the appliances and copper wiring... Leaves the homes impossible to sell and neighborhoods look like a gang war zone.

[hubbit.livejournal.com]

Quote from the article: Dave Rhodes of Oakdale recently took advantage of one such deal.

Damn. Maybe there was something to MAKE.MONEY.FAST after all....

[dustin-00.livejournal.com]

I'd call that high risk -- you buy a place, fix it up (optional), then try to sell it again... but you're competing with those 1,336 properties the banks are still trying to unload.

[solarbird]

The thing is, the loan resets and resulting failure rate spikes don't peak until 2008. This isn't even the end of the beginning.

[solarbird]

Yeah, I posted a few months ago about Detroit-area auctions with half-million-dollar houses failing to sell at $50K. But that's not the big thing. I mean, okay, yeah, it's big, it's actually quite bit. But it's the derivatives market that makes it terrifying. The total derivatives market is... nobody knows. As high as $160T. That's T. CDOs and related products are at the core of a lot of it. Insurance is necessary to prevent it from imploding. The best CDOs are trading at 70c on the dollar now. Lots of others are trading at 30c on the dollar, and lots more aren't tradable at all. The insurance was supposed to kick in to cover situations like this; spreading that supposedly very low risk was supposedly the point of CDOs, hedge funds, and all that.

Now you've got these insurance providing companies rated AAA three days ago (failure nearly impossible) suddenly being re-rated CCC (insolvent) and not having a fraction of the capital they need to cover their policies. This is real serious.

[angharads-house.livejournal.com]

Okay, you finally succeeded in delivering a daily dose of down thats... really DOWN. Gonna go ask for that sledgehammer now, 'coz clearly it is time.

Very glad we have zero debt in family.

[solarbird]

...ask for that sledgehammer?

[tanthalas101.livejournal.com]

good god.

even for those of us who have been anticipating the eventual unraveling of this mess for several years now, actually seeing it in action is still unnerving.

[grian-ruadh.livejournal.com]

All I can say is fuuuuuuuuuuck.

I am ever so glad we sold our house when we did. Not buying another one until this shitstorm settles down... whenever that might be.

[poodlgrl.livejournal.com]

You're really harshing my post-date mellow here.

[aerialscribe.livejournal.com]

There's always a boom tomorrow.

;-)