I think there will be at least one more big leg down. I see numerous potential catalysts; here are two:
- CFC (or the creditors) file a BK petition
- bank failures, e.g. VNBC, BKUNA, and DSL
Check out the deterioration in the
(enormous) CFC option-ARM portfolio. (Calculated Risk did a
post on this today. Also read the
comments on that post. Institutional Risk Analytics has the
best coverage of CFC right now.
I suspect that Friday 8/8 was an FDIC vacation; not the end of the
bank failure trend.
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