What's especially notable about the above AAA chart is its compression since it has traded at near par for months. It's not so much that the line has turned south, but for so long it had been a flatline as the AAA tranches seemed untouchable and not subject to consequences from the 'bad credit people'. In the past few weeks the picture has changed and AAA is even responding to what's going on down in the basement of BBB-, but also in AAA itself as high end folks can suddenly find themselves crunched. When adversity comes calling, even triple-A can start falling.
That leads me to BBB- series which has floated into the 40s...Earth to Bernanke - Forget about the helicopters to drop the cash, go with a fleet of 777 cargo jets instead.
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