Word: creditably
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...such as Standard & Poor's and Fitch Ratings wave their magic wand over these top tranches and declare them to be a golden AAA rated. Top shelf. If you want to own AAA debt, CDOs have been about the only place to go; hardly any corporation can muster the credit worthiness to garner an AAA rating anymore. Here's where the potion gets its poison potential. Some individual parts of CDOs are about as base as bonds can be - some are not even investment grade. The assumption has been that even if the toxic waste bonds really stink, the quality...
...mudfest that the grungy edge of the event has become dulled in recent years by the influx of "middle-aged" and "respectable" festival-goers. It's a common complaint this summer, with England's festival fields thick with well-heeled campers - the ones with fast broadband and an unblocked credit card to slap on a party-booking for family and friends the moment tickets go on sale. Good news for the corporate sponsors and, to be fair, the ancient bones of Iggy & The Stooges may have given Glastonbury's younger bands an object lesson in bad-assmanship...
...these days about the "re-rating of risk" and the lack of "liquidity" in the markets, what they are really talking about are gauges, however crude, of ignorance - and of fear based on ignorance. In the unfolding financial story of the year - the bursting of the global economy's credit bubble - "the biggest problem is we don't know what we don't know," says Khiem Do, head of Asian Multi Asset investing at Barings Asset Management in Hong Kong...
...core of this is, as Barings' Khiem says, a lack of information. It all started as a problem that seemed both predictable and containable: U.S. borrowers with bad credit history started (surprise, surprise!) defaulting on their mortgages. But that meant trouble for more than just the mortgage company or the bank that made the loan originally. Since the 1980s, individual mortgages have been packaged into bundles (so-called mortgage-backed securities) and resold to investors. Soon after came so-called derivatives, exceedingly complex investments that often trade based on the relationship between two or more underlying markets - mortgage-backed securities...
...wonder that last week, central banks - like a frazzled mother jamming a pacifier into a wailing infant's mouth - rushed in to try to calm the incipient panic, shoving $300 billion of fresh cash into the credit markets to make sure they didn't seize up entirely. (The Bank of Japan and the eurozone's European Central Bank both pumped in additional funds on Monday.) For the moment, the moves had their intended effects: following minimal losses in New York on Friday, Asian and European bourses on Monday traded mostly higher. Knowing now that central banks are willing to step...