Bond Outlook [by bridport & cie, July 11th 2007]
No sooner do we write of “a widespread refusal to face the CDO problem head on” (Weekly of 4th July), then one party is breaking the silence, viz. S & P with its threat to downgrade USD 12 billion of CDOs. Moody’s may have made the same threat even earlier, but they only whispered it. S & P were so loud that even stock market investors noticed! Indeed, the contradictory nature of bond and stock market responses to the sub-prime/CDO problem (bond markets concerned, stock markets dismissive) has, temporarily at least, ceased. |
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