Funny thing..... Europe purchased our CLO's and CDO's when the dollar was stronger... So not only are they taking a bath in the value, and that they are only mark to market at 40-60 cents on the Dollar.... it's a weaker dollar.
Jan 03 the dollar and Euro were even. Now it's .712 to the dollar. 70%.. What does that work out to be.... they purchased 1,000,000 of debt. which they can now sell at 600,000 if they are lucky... but they will only get 420,000 in eruo's for it now.... No wonder they are pissed.
Truth be told, right now if they buy those debts now. when the Euro falls (cause we will suck them down with us, over the next month) Then the debt they buy now at 420,000 will be worth 600,000 in a month or so.
And sure you can't currently sell it. but the defaults cant make it worth 60%. and in a month they will be able to sell it again... Maybe.... Then we really crash....
can't blame them for not wanting to loan us more money.
Thursday, September 20, 2007
Euro Beating
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