Reply #46: That is the nightmare scenario [View All]

and because the bond market is so huge it would take down pretty much everything else with it. The problem is that the real market is being propped up in part by this Alice In Wonderland world where financial instruments such as CDOs are never properly valued by being traded on the open market and everything is worth whatever the White Queen says it is. One of the main problems is that the ordinary man in the street does not realize to what extent his investment and pension funds are tied into this house of cards. No one knows really how this is going to play out but there is a good chance it will not be pleasant.

On edit - I expect we will be hearing a lot about 'marking to market' over the next 12 months

http://www.minyanville.com/articles/index.php?a=13172

Amazing that a financial community so outwardly devoted to capitalism constructs a world of financial instruments that simply ignores one of its central tenets.