Replies to post #107293 on ajtj99's Market Pulse

[jdaasoc]

It seems that credit risk repricing is costly if HD dropped price of deal by 18%.

That deal was only $ 10 B of the $300 B in the M&A pipeline. If this trend continues that means $ 30-50 B going to Zeev's "money heaven" just from pending M&A deals.

Every other debt class getting good haircut

high FICO score jumbo mortgages from TMA shaved 5%
total pool is at least $ 7000 B or $ 350 B at 5%
sub prime stuff discounted 20% or $ 600 B out of $ 3000 B
and now HD M&A off 18%.

Enron & MCI was only what $ 200 B.

I think that most brokerage firms were carrying customers home equity lines on margin. Customers will get a big shock when they reduce buying power on those "leveraged" assets and hike the margin interest rate to cover soe of the deadbeats.


People will prbably decide to sell some stock assets to cover some real estate debt in their potfolios.