Any stake 80% or greater must be consolidated on the Government’s balance sheet. Note this is why CBO director Orszag is pushing to consolidate FNM and FRE. NYT Dealbook had a post about this.

It seems that with daily mark-to-markets increasingly the rule (or equivalently, rolling a high percentage of one’s assets each day), one in two hundred means you’d be caught out once or twice a year.

I heard tell of a bond fund that had what seemed to be a negative seventy sigma (!) event today; there ain’t enough nines to say how impossible that is. But even 99.5% protection won’t help if the business is so brittle that the off chance takes down the company, rather than triggering some non-fatal outcome such as giving up a division.

While there are many facets to this mess, this might be the most succinct articulation of the problem I have read yet. Thanks.

What do you make of gold’s breakout performance so far today?

At one time you once owned a gold miner when you first started writing for RM. I’m curious on your views on gold.

While I completely understand what you’re trying to convey about the importance of maintaining adequate liquidity, don’t you think that this scenario is that 0.5% black swan, and thus capable of sinking the ship?

Sorry if this is a n00b question, but where can the average investor research for ratings triggers in bonds?

Thanks,
Rich