As indicates in prior postings, a major economic danger is the implosion of the CDS or "credit default swap" market, on which most of the remaining value of CDO [synthetic structured residential mortgage backed (and other) credit debt obligations] is based as "insured" investments.
========= Wachovia Unit Seeks Protection By DAVID MCLAUGHLIN August 15, 2008; Page C2
A unit of Wachovia Corp. that sold insurance against defaults on mortgage-backed securities is being liquidated in Bermuda and is asking a U.S. court to protect its assets here.
BluePoint Re Ltd. began liquidation proceedings earlier this month in Bermuda, where it is based. The company was brought down by rising defaults on mortgage securities and downgrades by ratings firm.
The company is asking the U.S. Bankruptcy Court in Manhattan to recognize the Bermuda proceeding so it can liquidate there. If approved, creditors will be blocked from seizing assets in the U.S.
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Don't take any wooden nickels...
Unka' George [George McDuffee]
------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).