Thursday, December 20, 2007

Credit default swaps - a line of dominoes, one falls

Karl Denninger reports on the savage downgrading of a credit default insurer from "A" to "CCC" (junk) in one move - essentially a collapse in creditworthiness - and explains the implications for credit and investment markets. His conclusion is crystal clear:

If you're long stocks, bail now.

2 comments:

hatfield girl said...

I'm unsure if I should be holding my breath or holding my nerve.

Sackerson said...

Agreed, and well put.