[thephyber]

From TFA

> But the losses from CLOs, combined with losses from other troubled assets like those commercial-mortgage-backed securities, will lead to serious deficiencies in capital.

You're making a pretty brave assertion given what we saw in 2008. I now assume that the ratings are all skewed to be too optimistic, publicly acknowledged exposure is skewed to underreport, and our ability to see the actual damage that would be caused by a system-wide collapse in CLOs isn't clear because we don't know what each opaque silo is doing to multiply or hedge those CLOs (and neither does any individual silo).

Also, capital reserve requirements dry up very quickly when a panic starts to set in. The Federal Reserve saved us earlier this year and in 2008+, but there comes a point when it won't be as successful and investors may start to see other markets as being comparatively lower risk, especially after the official US debt will likely jump 20-50% this year alone and we never unrolled the $4.5trillion in QE, only added another $4trillion - $10trillion onto that.