http://blownmortgage.com/2007/08/21/a-letter-from-a-man-who-gets-it-that-we-should-all-understand/

http://blownmortgage.com/2007/09/16/do-you-think-chinas-gonna-forget/

Bloomberg article about subprime bonds in money market accounts:
============= (1)
Until recently, CDOs had been the fasted-growing debt market — outpacing corporate and municipal bond sales by dollar total — with about $500 billion sold in 2006, up from $99 billion in 2003, according to Morgan Stanley.

About a quarter of the content of all CDOs sold last year in the U.S. was made up of securitized subprime mortgage loans. CDO sales slumped to $11.9 billion in July from $36.9 billion in June, according to JPMorgan Chase & Co.

…Money market funds with total assets of $300 billion have invested in subprime debt this year.
…Fidelity Investments, the world’s biggest mutual fund company, owned $2.3 billion in CDO-issued commercial paper in two money market funds….The biggest money market fund in the U.S., Fidelity Cash Reserves Fund, had 1.5 percent of its $98.2 billion assets invested in CDO commercial paper backed by subprime debt.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aEUtlgwzL_qc&refer=home
================ (2)
“This will go down as one of the biggest financial illusions the world has EVER seen”

- Randall W. Forsyth, writing in Barron’s – Aug 2007
It was all a big scam to unload garbage loans on stupid foreigners.

“He told me with a straight face that these CDOs were the only way to get rid of the riskiest tranches of subprime debt. Interestingly enough, these buyers (mainland Chinese banks, the Chinese Government, Taiwanese banks, Korean banks, German banks, French banks, U.K. banks) possess the ‘excess’ pools of liquidity around the globe. These pools are basically derived from two sources: 1) massive trade surpluses with the U.S. in U.S. dollars, 2) petrodollar recyclers. These two pools of excess capital are U.S. dollar-denominated and have had a virtually insatiable demand for U.S. dollar-denominated debt… until now.”

http://wcvarones.blogspot.com/2007/08/barrons-on-mortgage-mess.html
http://housingpanic.blogspot.com/2007/08/housingpanic-quote-of-day.html
===================== (3)

The analysis of loan data by The Wall Street Journal indicates that from 2004 to 2006, when home prices peaked in many parts of the country, more than 2,500 banks, thrifts, credit unions and mortgage companies made a combined $1.5 trillion in high-interest-rate loans. Most subprime loans, which are extended to borrowers with sketchy credit or stretched finances, fall into this basket.
http://online.wsj.com/article/SB119205925519455321.html
http://housingpanic.blogspot.com/2007/10/wall-street-journal-page-one-expose.html

“…But changes in ratings will force a re-pricing of the roughly $800 billion in subprime-mortgage bonds sitting in investment portfolios across the globe.”

Will subprime woes spill over to stocks?
Fears rise that rating-agency reviews could be a catalyst
http://www.marketwatch.com/news/story/stocks-feel-subprime-sting-debt/story.aspx?guid=%7B7B5B1C8B%2D5E0D%2D4C11%2D890E%2D96DA77B7C562%7D
==============

So this suggests that the total outstanding CDO market from recent years stands at about roughly 1.5 Trillion or more (interpolating from 500B in 2006 to 100 B in 2003). Of that 1/4 of the content is securitized subprime mortgage loans. ~ 250 B. marketwatch says there id 800 billion of it.

Now if you’ll permit an indulgence… Recent experience with the Bear Sterns hedge funds (Structured enhanced strategies or some such inane name) showed that when these investments were owned in a leveraged scheme, they essentially became worthless. The Bear Sterns funds lost on the order of a 1-2 billion each.

So that means that only ~20 Billion of ~250-800+ billion has been fessed up so far. The article suggests that some of this trash is hidden in money market funds, where at least it isn’t leveraged an makes up

About a quarter of the content of all CDOs sold last year in the U.S. was made up of securitized subprime mortgage loans. CDO sales slumped to $11.9 billion in July from $36.9 billion in June, according to JPMorgan Chase & Co.

…Money market funds with total assets of $300 billion have invested in subprime debt this year.
…Fidelity Investments, the world’s biggest mutual fund company, owned $2.3 billion in CDO-issued commercial paper in two money market funds….The biggest money market fund in the U.S., Fidelity Cash Reserves Fund, had 1.5 percent of its $98.2 billion assets invested in CDO commercial paper backed by subprime debt.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aEUtlgwzL_qc&refer=home
==

- Randall W. Forsyth, writing in Barron’s – Aug 2007
It was all a big scam to unload garbage loans on stupid foreigners.

“He told me with a straight face that these CDOs were the only way to get rid of the riskiest tranches of subprime debt. Interestingly enough, these buyers (mainland Chinese banks, the Chinese Government, Taiwanese banks, Korean banks, German banks, French banks, U.K. banks) possess the ‘excess’ pools of liquidity around the globe. These pools are basically derived from two sources: 1) massive trade surpluses with the U.S. in U.S. dollars, 2) petrodollar recyclers. These two pools of excess capital are U.S. dollar-denominated and have had a virtually insatiable demand for U.S. dollar-denominated debt… until now.”

http://wcvarones.blogspot.com/2007/08/barrons-on-mortgage-mess.html
http://housingpanic.blogspot.com/2007/08/housingpanic-quote-of-day.html
==

About a quarter of the content of all CDOs sold last year in the U.S. was made up of securitized subprime mortgage loans. CDO sales slumped to $11.9 billion in July from $36.9 billion in June, according to JPMorgan Chase & Co.

…Money market funds with total assets of $300 billion have invested in subprime debt this year.
…Fidelity Investments, the world’s biggest mutual fund company, owned $2.3 billion in CDO-issued commercial paper in two money market funds….The biggest money market fund in the U.S., Fidelity Cash Reserves Fund, had 1.5 percent of its $98.2 billion assets invested in CDO commercial paper backed by subprime debt.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aEUtlgwzL_qc&refer=home