"Sounds like we are essentially in the same book Plugger2, but...

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

Yeah, hah, good analogy. :-)

I think we both agree on the basic nature of the threats and the possible ramifications and flow-on effects -- the question is one of how to quantify these effects?

Someone mentioned BNP -- the problem they cited was they didn't have enough information at hand to meaningfully value CDOs -- and that uncertainty was the big problem.

While the markets struggle with the lack of transparency, prices will be depressed. As we all know, markets hate uncertainty even more than certain bad news.

But as a general principle, things will slowly but inevitably become clear who really is "holding the bag", as they say. As this information sorts itself out through the markets, things will become much more stable again.

My guess (and of course it is only a guess) is that the worst of the destabilising effects of the uncertainty is now behind us, and we will see things steadily returning to a more even keel.

My punt at the moment is XJO back to 6400 by the end of the week.

Catch you later, 50ftCat -- enjoyable discussing things with you. (I'm off to Father's day dinner. :-)

-Mark