I am glad to be in school right now so that I don't have to face the pragmatic consequences of the largest train wreck in history that we have been watching since June.
Another land mine was revealed recently when it Citi and others acknowledged that they basically wrote put options on CDO liquidity. For those who aren't options savvy, in English this means they agreed to bail out up to $25B of CDO's to the extent they run out of money.
This article discusses the details, but to me this is just one more in a chain of events suggesting that the full brunt of the credit unwinding that we are currently in the midst of will not be known for at least a year and maybe longer:
The $25bn Citi CDO liquidity put - and who else has one
Happy Thanksgiving!
Thursday, November 22, 2007
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