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January 29, 2009

Comments

fletch

moral hazard as an exclusive strategy?

mr mcknuckles

I suspect Citi traders know govt will step in and buy or at least guarantee assets on their books. So they have incentive to buy the worst crap because they can pawn it off to govt at a slightly higher price. Nice way to lock in a bonus.

fletch

maybe they are buying protection from Uncle Sammy on every bond they buy and have a standing "re-insurance" rate w/out the public having been informed about it. (i hate to speculate like that cuz many false rumors get generated out of apparent conspiracy coinkiedinkies (technical term)). don't know what else would make sense. how about calling your pal Crudele over at the Post and have him ask the q in one of his many governmental FOIA requests, all of which to my knowledge have been stonewalled.

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