Tuesday, February 05, 2008


No one is buying and selling big shitpile.

Feb. 5 (Bloomberg) -- Buying and selling of collateralized debt obligations based on mortgage bonds, high-yield loans or preferred shares has ground to a near-halt, traders said at the securitization industry's largest conference.

``We're definitely in a period of very low liquidity at the moment, which has actually been dropping precipitously in the last few weeks,'' Ross Heller, an executive director at JPMorgan Securities Inc., said yesterday during a panel discussion at the American Securitization Forum's annual conference in Las Vegas. ``It's a challenging time.''

You can believe that potential buyers have an irrationally low view of the value of these things or you can believe that potential sellers won't sell them for what they're worth because it'll reveal that the rest of the big shitpile isn't worth much.

You can guess what I think the case is.

And CNBC is discovering that ratings agencies have a wee conflict of interest. They're paid to rate these things!