Friday, January 18, 2008
Subprimes: Just the Beginning
Examine the pretty picture below:
Now think. What happens IF the swap-seller (left, above) runs out of cash?
Well, it's happened already. So the buyer (right, above) is not only holding rotting "Widgets 'R' Us paper, he's spent a bunch of money to buy MORE rotting paper--from the guy on the left.
Think that won't have an impact? Read the blogpost linked. I'll give you a taste:
I've said it before, and I'll repeat it again: To err is human, but it requires an MBA to create total clusterf*&^ . . .
HT: The Big Picture