[Arktwo] Understand this

[Bruce Beach]

A reader writes - 
that I should understand the following. 
Hah! 
Not likely. 
I am beginning to understand 
just enough about this stuff 
to be dangerous. 
Anyway - here it is:

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I am going to say you got the ABX wrong. I trade this stuff. It is the
series of indices on various vintages and tranches of subprime mortgage
securitizations. The collapse has been going on for months. The reason
the BBB- is trading in the 20s is that it is a tiny sliver of pools of
subprime mortgages which starts being impaired with only a few percent
losses in the pools. Since most people think pool losses will be in
double digits, the BBB- is actually more likely to drift toward zero. 

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Peace and love,
Bruce
DawnSayer@webpal.org