Is it worth par? No. Is it worth 50 cents on the dollar? I do not know.
Any rating agency is under a lot of pressure to downgrade all of that paper. I am betting that they will be proactive and downgrading will be significant. They have to preserve their brand. They cannot be sitting back watching everything go delinquent.
There is a question of a contagion. I do not think it is a question. I think the only question is how significant will the re-pricing be? Could it reach $100 billion? It could reach more.
Right now, we are in an unwinding process, it is still early in the game.
~ Bill Laggner, Bearing Asset Management, "Subprime Summer", Hedgefund.net, July 16, 2007