The essence of the story here is that for the week ended 21 July, 2010 Wall Street was unable to complete an unprecedented amount of trades in the Mortgage bond market. $1.34 Trillion worth of trades were unable to be completed that week by comparison to a weekly average of $150 billion, that's almost 10 times the weekly average.
The implications of this are many and varied, but rather than me repeat what has already been said by Jim in his story and also the Bloomberg story I've provided links at the bottom of this post so you can check them out for yourself.
It's also worth noting that the total Mortgage bond market is said to be worth $5.2 trillion, so that said, $1.34 Trillion would amount to over 25% of the entire Mortgage bond market.
Mind blowing really, that in essence 25% of the entire Mortgage bond market was sold as naked short sales that week. With behaviour like this in the markets, you have to wonder how long before all confidence in markets is shot.
You can read Jim Willie's story in full here and Caroline Salas and Jody Shenn's story on Bloomberg here.
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