sunday subprime saviour meltdown, page-26

Sounds like we are essentially in the same book Plugger2, but maybe different page?

I think that it is not just highly leveraged hedge funds that are exposed to holding leveraged parcel of these potentially taxic loans. Super funds, banks, the whole gammit will find that hey (perhaps unwittingly) have ended up owning the problem.
The repackaging of sheet and calling it caviar (with the help of the ratings agencies tranforming junk to AAA) has been an enormous scam, the full extent of which is nowhere near known yet.
If it's anywhere near as bad as some think then beyond the obvious monetary losses there will be an enormous loss of confidence & that will effect every aspect of world markets.

I agree that, with the US Gov stepping in to be seen as trying to help the distressed individual borrowers, we are now less likely to see the Fed drop rates. Particularly since a drop of even 1% would do nothing to fix the claimed problem (ie mortgage default in resetting sub-prime loans) & would in all likelihood
fuel inflation, something that this Fed has been vocal about keeping in check.