Brave buying now, commodorecontrarian.As I've said before. The...

Brave buying now, commodorecontrarian.

As I've said before. The $6bn XCP relates to profit earned in the past. They also have another $3bn of rolling facilities, which also relate to past profits, but which they didn't get out to the MBS or XCP market in time.

They have to do something with these debts and I'm sure it's exercising management's minds and time far more than they need at the moment.

However, the fundamental point I keep hammering remains the same: with only $1m of net assets, they need to keep up new lending at a cracking pace, otherwise they can't pay their staff, rents, advertising, etc.

So, ask yourself: if they can't place $9bn of old debt, how in the world can they keep on writing new mortgages with any confidence?

I think they're operating on a wing and a prayer at the moment - hoping the credit markets free up before they have to bite the bullet. If I were you, I wouldn't buy a thing until I heard an update about how current business is going.

I think that this is what has the sellers worried and the selling smells like some insto's getting out, to me - it's been relentless the past few days.

BTW, you're right to have doubts about some anonymous poster on a forum's experience with past credit crunches. However, you no longer have to take it from me. Take it from the US Treasury Secretary and ex-CEO of Goldman Sachs, Hank Paulson:-

Paulson Sees No End to Credit Turmoil
U.S. Treasury Secretary Henry Paulson sees the crisis of confidence in credit markets lasting longer than previous financial shocks of the past two decades, the Financial Times reported on
Wednesday.

Paulson said the uncertainty would last longer than the turmoil that followed the Asian financial crisis and the Russian default of the 1990s or the Latin American debt crisis of the 1980s, the newspaper reported.

Paulson, a former head of Wall Street investment bank Goldman Sachs, said the complexity and global distribution of the securities at the heart of the current problem could prolong the crisis.

"We expect this period of turbulence to go on for a while," the newspaper quoted him as saying in Washington.

The Wall Street Journal reported that Paulson did not offer any remedies for reducing the credit strains in his comments at a breakfast on Tuesday sponsored by the Christian Science Monitor.