shaved heads
Margin Calls: If you want a better haircut, get a better head
Submitted by rba on Mon, 03/10/2008 - 20:24
Tom Cahill+Katherine Burton/Bloomberg:
Hedge Funds Reel From Margin Calls Even on Treasuries
Collateral `Haircuts'
Banks usually limit their risk on repos by lending less than the value of the securities used as collateral. Tequesta was able to borrow $95 on $100 worth of AAA rated jumbo prime mortgages in early 2007, meaning the bank took a $5, or 5 percent so-called haircut. By last month, the amount required had risen to as much as 30 percent . . .
Damn. Looks like those "international fine-ant-seers" been stricken with a case of terminal stupid. Imagine that: loaning 95 real dollars on 100 bux worth of counterfeit. Oughta be a crime.
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Image @ PossumSal
