BOB: I hear you but I am missing something...What I am missing is that if defaults are less than 10%, I would think a set of buyers not wired to normal banking restrictions (so highly evolved sophisticated and unfathomable leveraged ponzied minefields)) could be induced to accept a "titrated" masterminded disount (new thigamagig symplified), double+ known current default rate (the discount such a bond may bear), as so many talking mouths in media say this has been overblown; maybe that 1/2 of glass full glass certainty parties would buy into such a new instruemnt?
I hear that what we have is not a run on banks but a run on derivatives which have an uncertain unmeasurable value. I was just thinking of a way to start from "now", some discounted paper reflecting a much worsre senario ,just as buying future options on weakening commodities somehow prices in future price declining expectations?
The underlying value of the assets the mortgage were originated upon have an historical history of falling no more than 30%......That is what I am missing,historical worse case 30% decline, yet large entities are going B/K as if these derivatives are worthless. I would like to see yet a new junk bond type instruement which could be offered as a new last resort defense
sold to those in universe who feel things are about to perhaps get noticabley better mid range and will wait 2-3 years for their money. A high risk prop underwriten by those willing to take the risk in a bond they uh sort of understand.
AI
