Monday, August 08, 2011

Retched of the Earth?

Dow down six-hundred and thirty-four. Debtonomics? Downgrade? Europe?

Paul Krugman notes another theory by John Hempton:

You see the desperate selling of the biggest liquid names is a sign of margin calls.

The market is not puking. Some prime broker is puking the stocks held by one or more very large hedge funds.

So lets play the game: guess who got the margin call!

Favorites in the comments (and Krugman and Hempton): Paulson - I think the same one who made a killing on the collapse of the mortgage market.