Mortgage Market Evaporates: Chris Mayer / August 10, 2007

It's been fascinating to watch this whole credit crisis unfold. The panic,
the drama, the stupidity of it all... it's great drama! TV and the movies
have nothing on the markets...

Yesterday, a French bank froze the assets of three funds invested in U.S.
mortgages. Why? Because there was no bid for the mortgages. No price.
Imagine that. You own a stock and you try to get a quote and nothing comes
up. Here's a great quote from a spokesman at the bank: "We've no longer been
able to find prices for the assets, despite the fact that the quality of the
underlying assets has remained high... If there's no pricing, we can't find
the net asset value for the funds each day, which is something we must do to
allow people to buy in and exit the funds."

Wow. That's how bad things were yesterday.

This mortgage unwinding is emblematic of a market full of weak players. Some
of the selling going on now in particular stocks is downright foolish.
Undoubtedly tomorrow's winners lie in the warmed over ashes of busted up
markets. When everything goes down, you know there are some treasures among the refuse. I aim to find them. — Chris Mayer

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