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I've been gone a day or two. As I have hinted earlier, my full time job is father/husband/son, and my parents just had their 42nd anniversary, yesterday was Halloween, and wifey's birthday is today. I've been a bit preoccupied. Hopefully, my subscribers have been placated by the prescient performance of the timely insurance update. There is more to come.

As was indicated in the last two udpates, Hartford Insurance Group is in realized loss hell (and unrealized loss puragatory). They have more problems coming down the pike as well. I should have a full blown forensice report for professional subscribers next week some time. In the mean time I will leave you with this.

The financial services industry (at least the portion that uses its balance sheet to generate revenues) is a vey incestuous beast. If one catches VD, a half a dozen must visit the clinic - Lehman Brothers being case in point.

Well, HIG was both reference entity and counterparty to quite a few CDS, not to mention the fact that many insurers hold HIG debt which is most assuredely to be severely downgraded. Here comes the domino effect.hig_cds_spreads_23237_image001.png

Hartford's yields have spiked into junk territory (pretty much where they belong).

 

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Hartford's CDS spreads have blown by a multiple of 4x to 8x.

Here is a spreadsheet for professional subscribers detailing the exposuse of the top 200 Hartford debt holders that I was able to dig up on short notice - more work definitely needs to be done, along with a target on the top 10. Notice that the top 10 have significant exposure.

pdf  Hartford Insurance Group spreads and counterparty/debt holders - pro (149 kB 2008-11-01 09:39:04) This is an Excel 2007 binary document, and either the newest version of excel or equivalent excel reader will be needed to acceess it.

I will be issuing a REIT update in the next 48 hours for all subscribers.