So at least we seem to agree that there was a lack of due diligence on the part of the investor. I'm sorry but when your putting forth million of dollars into an investment and all your going to do is look at what some easily influenced trade report is telling you. You shouldn't be surprised if you get burned.
Investments do not guarantee a rate of return. If I lost a million dollars at a casino I wouldn't go to the government expecting my money back. Regardless these investors are not much different than habitual gamblers, they just want to make the next buck and getting burned once will make them more cautious yes. But the vast majority of them will be back at the tables feeding there addiction soon enough. After all it sure beats a real job...
Although i do agree there is no lack of liquidity there’s a lack of faith, which really isn’t really faith either it’s more confusion as to where the herd will go next to make a quick buck.
“AAA”, “AA”, or “A” paper is all considered investment grade. If “AA” paper is subject to 78% losses or even worse, what should be expected from “BB” paper? 98.3% losses?