Before the bell-5 brokerages downgrade Thornburg Mortgage (TMA)this AM. Stock closes yesterday down 3.78 to 14.28, trading at 10.83 premarket. No corporate news. They all had an epiphany last night? Interestingly, Chairman of the Board purchases 200,000 shares at 23.42 on August 8th. Who knows the company better-HBB or corporate insider? Place your bets.

KRY is picking up some pre-market momentum based on this article
http://www.mineweb.net/mineweb/view/mineweb/en/page66?oid=25079&sn=Detail

UNG-adding on the opening drop
PWE-adding on the opening drop
GDX-adding on the opening drop

RE: TMA

S&P downgraded their credit rating on Friday.

Brokerages sleeping on the job again!!

Link to article here:

http://biz.yahoo.com/ap/070813/thornburg_mortgage_mover.html?.v=1

SLW 13.08
GFI 14.84

For the 5th or 6th time in a row, KGC is trading around 12.50 at the end of the options period. You can buy 12.50 options for this Friday for around $0.20. Choose up or down, calls or puts if you feel confident either way. Or buy both, if the stock moves around $0.30 either way you start making money.

like the opening negativity and adding further to GDX...if you're going to buy, gotta do it when it's like this...

Have been adding GDX every 10 cents down. Now if it would just reverse a bit and give me a chance to reload....

OG and 2nd, it does feel like the coiled spring is ready to go.

OldGoat-think you have the right idea, which is keeping position size(s) manageable, and selling into strength to further reduce your basis when possible...think XAU and UNG will close in the green today...

GLD down 0.03%
GDX down 2.48%
What's wrong with this picture?

2nd -- So where is this strength I'm supposed to sell into? (In my mind, I hear you telling me "Patience, grasshopper.")

Someone wrote yesterday about an analyst writing about certain sized miners and the effect of hedging on their financing deals with majors.
Bullion is less exposed to this issue, if any.

Maybe that is the 2.5% difference between gold/silver and the miners?

I'm feeling sufficiently uncomfortable at this point......

OG-don't know for sure...margin calls might be one reason...feels like HL at 6.69...then the sellers stopped and it went the other way..

Apropos the comments LOLOL made about Mr. Cara over the weekend. I know Bill said let's move on; however, unfortunately I sometimes run behind the curve so I want to have my say now.

When a person runs a successful blogsite, he is naturally a target for challengers. You know, the king of the mountain becomes a target to be knocked off. I have read about Bill's credentials and believe he is the real deal. When challengers are seasoned such as he is, I will lend them credence. However, when they are not seasoned such as he is with his experience and accomplishments, I'm sorry, I will discount the criticism, especially if it is written in a confrontational manner. There...I feel better!

A good day to all.

Retesting those lows YET AGAIN. This is not good action.

this is why
11:00 am : The market continues to deteriorate as speculation about a letter to clients from a money market fund halting redemptions is confirmed. Within the last 10 minutes, CNBC reported that Sentinel Management Group has asked permission from the CFTC to halt money market redemptions.

Sentinel's inability to meet significant redemption requests has exacerbated the liquidity concerns that have led many to believe a real credit crunch is forthcoming. While the credit markets continue to experience liquidity problems, which are real and of serious concern to the financial markets, there is no evidence yet of a credit crunch that would impact the overall economy. Nonetheless, the Financial sector has edged even lower and is now down 1.9% as the bottom continues to fall out of the brokers and banks. DJ30 -147.38 NASDAQ -24.26 SP500 -18.55 NASDAQ Dec/Adv/Vol 1645/1099/448 mln NYSE Dec/Adv/Vol 2169/867/380 mln

OG-based on northforker's post, you might try pairing the XAU long with an XLF short...

CWT (California Water) has an interesting chart--especially for a utility. Big intraday swings almost every day. Huge spike and retracement in past few days.

this was my concern last night when I posted about the ABCP & Coventree. a run on MMFs. They are full of this stuff. Read your prospectus. In a real crunch they could "break the buck"--But in that case, where else is an individual to go, except gold or Treasury Only MMFs? I have been musing about the realative strength of Barrick for some time. The Big Boys can't hide out in the juniors

n/f-

Isn't the real problem all the "pier loans" that HBB is stuck with right now? They signed up for the deal and now can't unload their commitments. Lotta balance sheet suddenly tied up on something they didn't want in the first place, just the fees.

Yes, I think that is a problem. But the bigger problem is the contagion speeding through the credit industry, contagion based on fear--lack of transparency--lack of confidence. It is the lack of confidence that is the killer, and what the central banks are trying to address. Sentinel was another shoe dropping this morning

Given Bill's excellent commentary this AM regarding the Fed's recent actions and the eventual repercussions, is everyone owning/buying SKF ?

Are the dividends safe (not likely to be reduced)in stocks like WM, WB, C, BAC ?

The charts in the financials look just awful - many of them rolling over and falling below the 200 DMA with multi-month tops in place.

An aside: Bill, in case of a hurricane, don't mess around. Get inside and get safe. They're not to be messed with ...

The bears have been
in control of this market since we lost the trend line at SP 1530. From that time to the present the breadth trends have been very poor along with new highs to lows. Cash is king and the unemotional charts are telling the story. Guilty of chasing the last high instead of missing the proverbial trainwreck. Fido's MM is still one buck per share.

I did just a quickie this a.m. in SRS. same chart pattern as SKF.
Based on technicals. impulsive move on the 5-min chart.

And, no I don't think the dividends are safe. cup half empty world view

Bill, looks like you're not alone, Kaimu might be hunkering down for a big storm as well. Good luck to both of you...

http://tinyurl.com/yvpu5q

ECU Silver (ECU) announced Q2 results today and has fallen 10% on heavy volume.

ECU Q2 Financials
http://tinyurl.com/34cntf

UNG-when it moves, it moves!

ECU says they de-emphasized production for exploration. Why would they do that? and cause revenues and profits to fall so far? Does that strategic move make any sense?

Once you're a producer, you're judged on revenues and profits, so I can't take that change of strategy at face value !

Check out Laramide LAM.TO--it is now around 6 dollars C. Compare to Khan Resources KRI.TO which has declined significantly less. Does anyone know why Laramide might be in free fall? Considering the prospects for uranium as an energy source, I can't understand this.

OG-man, now i know what bill means when he says "despite all the screaming around me, i continue to remain bullish on PMs..."

If SP500 can't hold 1530 area there's probably a lot of stops on the other side.....

Errata: 1430

Can anyone provide some insight into the behaviour of gold lease rates - they have the charts on kitco.com As I understand it, they show the interest rates, presumably payable in gold, for leasing gold at points in the future from one month away to one year away. They took a simultaneous turn north a few days ago, which I interpret as a shortage of gold available for lease, but it doesn't tie in with the POG.
TIA,
confused in California

BMD, loss .07 est loss was .02 glad I'm out.

Perhaps a buy opportunity at some point.

craig-did you notice the updated insider sales as of august 13th..i meant to post the info yesterday and forgot, for which i apologize...glad you're out...
http://tinyurl.com/22pbr7

Is there an arbitrage opportunity here?

MFC is down 1.75% in Canada, 2.99% in US.

What does this mean?

They are almost at 3 month lows after their glowing results last week.

Is it just getting dragged down because of hurricane concerns & the general market?

http://tinyurl.com/26v6re

this is spooky -- there's NO buying coming into this decline as evidenced by the TICK.

Nouriel Roubini has some very interesting things to say about the recent liquidity injections in his latest posts on his blog. He distinguishes between liquidity injections when the underlying problem is indeed a liquidity problem vs. an "insolvency" problem. He says the current situation is more of an insolvency problem and the current injections will only delay the day of reckoning and actually make things worse. You can find his blog by googling on his name. Anybody out there follow Roubini, and if so, what do you think?

Bill,

How much of NEM's move do you think was due to the post 9-11 specific liquidity injection? Starting in January of 2001, the Fed was already aggressively easing. First with quarter points, then with half points, and then fine tuning with quarter points at the beginning of summer. After 9-11, they started cutting with 1/2 points again.

http://www.tiny.cc/HvMxZ

I have a basic question. Is the 15th always the deadline for withdrawals in a month from hedge funds?

craig-thanks for the heads-up re BMD...out late, but close to my basis of 3...gave up huge gains last month, man...

here comes the paint

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a56tmiBkXat8

Aug. 14 (Bloomberg) -- Banks are refusing to supply emergency financing for 17 Canadian asset-backed commercial paper issuers managing funds of C$27 billion ($25.3 billion), including funds run by Coventree Inc., after they failed to sell short-term debt....

BMD:
So everyone jumping the ship here? what about that $8 price target.

Unfortunately I am not able to get out as I am in the middle of transerring the account from Ameritrade to IB.

I know we've never had a direct hit from a hurricane here, but the same can't be said for my port today....

Glad you didn't take a loss 2nd. I hate that.

Hello Cap'n and the Community
Does anyone doubt that the nikkei could lose 1.1% tomorrow in response to todays action in the US and thus cross Bills 16660 line in the sand? Or does only the close matter?
peace
Gray

aucourant,

I've been reading Nouriel Roubini's blog at rgemonitor.com for about a year now. Both he and his associate Brad Stetser have been pointing toward the current fiscal turbulence for some time. Last year there were many detractors loudly berating their 'negativity'. Lately, those trumpets have been silent. I find Dr. Roubini's analyses thoughtful, well supported by evidence, and a useful antidote to overy zealous bullishness.

Here's a link to his site: http://tinyurl.com/2fwzfa

. . . that's 'overly', not 'overy'.

nf, thanks for that link. The National Bank is one of those banks, which happened to have some of my money market funds.

jogyp-if i had played BMD the way i've played all my other trades the past two months (and kudos to craig for having played it that way), i would probably have banked the equivalent of a 3 bagger...my positive outlook on the company really blinded me to the trading opportunities...nothing has happened to the target of 8-12 (assuming no news beyond the larger than expected loss), and it may yet turn out exactly as hoped...my mistake was the outsized position i took, which forced my hand this morning...

ooomph-

Buyers disappeared today. Inability to bounce from oversold conditions is not exactly, uh, BULLISH.

2ave- What was the overlap on the paired trade you suggested to a reader? I didn't get it. Couldn't that go wrong both ways?

BMD: at about 25% off I am nibbling back in ($2.55) A nice reversion would be in order....once 2nd gets back in and JogyP has his account under control. I'm a patient person.

I better be. My GDX needs scuba and let's not discuss SLW for a while.....GFI may bail me out as I have a good basis. No worries on the bullion so far.

I'm good with bill's fundamental view, but the sentiment may not cooperate. Sure is negative out there and we didn't hold S&P 1430 at the close. Looks like we may test dow 12800.

tough call deciding when the selling might end, but hanging onto commodity positions (NBR/PWE/UNG/GDX/GFI/and "?unfortunately" still holding a LT position in KRY) for now...and staying away from other sectors...

markm-not sure i understand your comment about "overlap..." -given bill's advice to overweight commodities and underweight financials, was advising hedging the GDX long with SKF or another financial short..

Not exactly, um, BULLISH? What ever makes you say that?

It couldn't be the AD line on the NYSE, could it? At -2429, it's lower than even -2247 on the 3rd.

And the SP500 closed below the 6th's close of 1427.58. On the lows of the day. Again.

What has me worried is the lack of blood in the street. There doesn't seem to be any wholesale selling, no rush for the exits.

On the plus side, the RUT and the COMPQ didn't hit their recent lows, so we have a possible non-confirmation.

I don't see an end in sight, and tomorrow should be one bumpy ride. Fasten your seatbelts!

aucourant, thanks for the link to Roubini's blog. It was sound analysis.

2ave-

I "pair" in related stocks or indices. I don't see the relationship between the financials and the miners. If no relationship, it's not a hedge or a pair it's just two trades. They can both go up in flames at the same time. That's my take.

omphalos -

I would characterize the underwater freefall of major quant players (G-Man, Renaissance) last week as a bloodless event. (As an aside, I would be interested in understanding the dynamics of their failure. Could it be that they went from too deep in the long RUT/short S&P play to the reverse extreme situation by Fri./Mon. morning last week only to get whacked again on the squeeze through last Wed.? Maybe "historical" relationships did not hold because of lower manpower on the Street??). Volume (at least last week) was violently high as far as I recall.

Although a pessimist by nature, I also noted that RUT has (relatively) stabilized from the earlier drop. I don't take S&P's close today below support) as too alarming yet - I got used to seen support failures of a more decisive magnitude. Are we getting the outlines of new trading ranges RUT 760ish/800 & S&P 1420-1500?

Third, DJI sits on top of 13k (psychological/headline support) and 170 points from 200DMA/Feb 2007 top. I am almost tempted to prepare for a "hedge fund special" bounce play right about here. Bears complained a 1k up move in less than two month w/o retracement. Now we have had a 1k down move in less than a month (700 points in less than a week btw).

Finally, I am sure that shorts would not look upon a rebound and calmer conditions with a bad eye. Need to reload before the Fall (and take a vacation).

JML

Aucourant,

I won't say that I "follow" Dr. Roubini but when I have the occasion to hear him interviewed and/or read something he has written, I find his analysis is consistently thoughtful and (to my mind) sensible.

He has been worried about precisely what's happening now for a long, long time. His blog comment today about illiquidity versus insolvency assistence is on the money IMHO. Thanks for reminding all of us about him.

Sooo... if commercial paper isn't getting funding, does that mean that Money Market funds gain risk? Some (if not all) of the notes mentioned in the Bloomberg article are held by Canadian money market funds. The prospectus I read stated that they are not to be held by residents of US.

Is a precedence being set here or has this happened before?

Some nice radar on Tropical Storm Dean, and news around freezing of redemptions for various funds here:

http://byzantine-ruins.livejournal.com/

"Post 9-11 liquidity injections went into inflating asset prices, ie stocks, bonds, etc.

The current liquidity injections are targeted at the credit issues. Will the current liquidity flow to the same assets as before?

The current liquidity injections are greater than 9-11. Think about that for a second. What is really behind the curtain? What has global central banks so spooked?

If todays market action continues, it doesn't bode well for liquidity sparked rallies.

Watching GS for signs. No position in GS, took small loss.

Who in their right mind would be selling gold here?

Posted by: g034 at August 13, 2007 10:03 PM"

I continue to stand by this statement...only one day I know.

Gold didn't get sold today (question was discussed yesterday, no need to answer).

GS needs some help from Paulson or he will have some explaining to do, lol.

When volatility drops, I guess that will be a sign of the end of fear selling. Unless of course it is due to a massive rally of the short covering kind. Watching volatility.

Question?
If the FTSE and DOW break support levels will every sector experience a rapid sell off?
I would expect finacials, retailers, and the interest sensitve stocks to have a dramatic sell off as Bill suggests. In addition, I would think commondity related stocks would sell off as well, ie. oil, PM, and metals. Therefore, the only safe place to be would be cash. TIA

Booyah!

Jim says to ride it out... and this article answers some of my previous post's questions.

http://tinyurl.com/2jw2cj

On a different note, if you follow these.

Gates charitable fund bought McD's, Progressive, and Kodak as of June 30. Buffett bought BAC & Dow Jones.

http://tinyurl.com/39odhk

http://tinyurl.com/3ypqkb

Something tells me comfort food will be more popular shortly.

PnF flyers or die-ers?

SP500 and Transports at double secret probation support.

Is Bernanke on vacation with the Iraqi Parliament?

Stocks are Still above Supports by Richard Suttmeier
Updated: Tuesday , August 14, 2007 15:13 PM

http://tinyurl.com/28t9jj

Wavesmash:
Is a precedence being set here or has this happened before?
------------------------------------------------
"Coventree is one of the first companies to delay payments on asset-backed commercial paper in the U.S. and Canada in the 12 years since the debt was created."

http://www.bloomberg.com/apps/news?pid=20601082&sid=a.clLcZQXl8Y&refer=canada

Old Goat: "Have been adding GDX every 10 cents down." If we are to be in a true bear market, I would surmise that the gold miners will be in the rinse cycle along with everything else. We are witnessing massive de-leveraging, and there is no immunity for any asset class that had leveraged dollars--that would include gold stocks.

Is it possible to get the posts of any given responder exclusively on this site? That is if one wants to read all that that person has said over a given period of time.

Well there you go...

Minimum investment on some of those money markets is $100k and they are not covered by the CDIC. Northwest Money Market Fund appears to be one affected, National Bank Corporate Cash MM appears to be another.

Back to subprime, here is a report from DBRS around exposure by metropolitan area & percentage estimates for bankruptcies.

http://tinyurl.com/347btx

Finding posts by user - you can search on the home page.

wavesmash,
I see that I can do this through search. Thanks.
Although I can get better interest rates on idle trading money with Ameritrade's "The Reserves Fund's" money market account, I have stayed in their US Treasuries fund for better security at a lower interest rate.

JogyP,
What are your reasons for the switch from AMTD to IB? I have considered the switch as well for the better live charts; time frames. But can't one also do this with QuoteTracker, one of their free screens? I don't know if I like the cost of 5K shares of micro stocks at $25 usd per side. AMTD is $10 usd. Maybe the difference between the two balances out. Although the fact that one can see a trade go off on the TSX is a plus.

Re: Accountant

Yepp, I follow Roubini. It's a good supplement to Bills blog, along with Chuck Butler's Daily Pfennig, which I try to read regularly.

Jan 60 puts on crude oil up 50% since I talked about them a few weeks ago.

BMD-accepting responsibility for making the wrong call on this one, totally messed (or insert verb of your choice) up...

in retrospect, can't believe i sat on a 33% gain- not once, but TWICE (mid-June and again in mid-July) in the past two months-resolutely refusing to sell a LT position for anything below $5...stopping for fortification before explaining this one to the wife (lol)...

having said that, not reading anything in the quarterly report that changes the LT outlook...an increase in gross revenue from $87,829 for the 6 months ended June 30, 2006 to $4,864,797 for the 6 months ended June 30, 2007 is not usually associated with a company in trouble...craig is the one who's playing this one correctly...

stktrader:

My main reason for the switch is commissions.
http://www.interactivebrokers.com/en/accounts/fees/commission.php#bundled

I made over 150 trades in my IRA account alone this year and I can save with IB's commissions.
I have 2 other accounts with ameritrade and 2 with fidelity also. I still plan to use Ameritrade Command center 2.0 for streamer.

Another reason is for the switch is they allow day trading in your IRA account with IRA margin(No borrowing).

So far what I am finding with IB is that their Customer support is very limted and they communicate almost everything through e-mail and chat.

I subitted the Acct transfer request last week and I got this e-mail this week:

"Your recent Funds & Banking request #393XXX for account UXXX7X has been rejected for the following reason:

Submitted to NSCCACCOUNT_VIOLATES_CREDIT_POLICY_OF_RECEIVING_FIRM (Account Violates Credit Policy of Receiving Firm): IB DOES NOT TRADE SILICON GRAPHICS INC
"

Not very customer friendly IMO.

I had an old bankrupt company (SILICON GRAPHICS) in my account with value 0. Because of that they cannot accept the transfer. So I need to send a request to TD to remove SGID from my account which will take 30 days according to TD.

If things go well with IB, I plan to transfer other accounts too.
But if the market goes down like this, I may not be trading much at all!

BMD:
I am concerned after reading this section. Sounds like they have trouble selling their rock.

"Although June's activity was a good demonstration of the growing productive capacity of the MVQ, ordered quantities to date in Q3 are lower. Discussions with oil sands companies indicate that demand for Birch Mountain's aggregate products remains strong and the Company continues to quote on inquiries. The Company believes that uncertainty around a potential labour disruption by a number of construction unions may be a factor."

JogyP,
Let us know about your experience once you are up and running; like charts, other trading tools.

jogyp-i would categorize "potential labour disruption" as a ST problem...construction by oil sands companies will proceed regardless...in fact, i would almost view it as a positive-unions don't bother getting involved with companies that lose money in a static industry-just the opposite...agree with craig's outlook, and will be looking for another entry...

Here's your market mover:

http://quotes.ino.com/chart/?s=NYBOT_EJ.U07&v=dmax

Derivative money markets in Europe, collaterlized debt obligations in America.

Thanks Bill. I was curious to how that injected money into the system can find a lasting home when we are told by the media that it is 'returned' by three days. I'm still trying to understand the world that is HB&B and CB's. Many thanks for your explanation.

And from tomorrow's NY Times, more on MMF safety:

http://www.nytimes.com/2007/08/15/business/15fund.html?pagewanted=1&adxnnl=1&ref=business&adxnnlx=1187143242-Snn2ylitMzs7N962In9Ipg

(you have to register to read it. registration is free.)

Turmoil in the subprime mortgage market spread again yesterday — this time to a type of short-term security held by money market mutual funds. These funds have become the investment of choice for many people seeking a safe haven.

Standard & Poor’s, the ratings agency, warned yesterday that it might downgrade several issuers of commercial paper, a short-term I.O.U. by companies that promise to repay loans typically within a few weeks to a year.

In these cases, S.& P. said, the commercial paper was backed by residential mortgages.

The amount of commercial paper in the United States has grown to $2.2 trillion, according to Lehman Brothers, with about $1.2 trillion backed by residential mortgages, credit card receivables, car loans and other bonds. The major buyers include pension funds, insurance companies, hedge funds and short-term money market funds.

Investors have flocked to money market funds as they try to avoid volatile stocks and the seized-up bond market. Last week, more than $36 billion moved into money market funds, the largest shift since December 2005. In all, some $2.6 trillion is in money market funds, according to AMG Data Services.

Such funds are sold to investors as the equivalent of cash, and their $1-a-share net asset value is considered inviolate. But if the funds experienced big losses, the value of the assets could be vulnerable.
The S.& P. highlighted four issuers of commercial paper for possible downgrading. Broadhollow Funding, which was set up by American Home Mortgage Investment, a lender that filed for bankruptcy last week; KKR Atlantic Funding Trust and KKR Pacific Funding Trust, two affiliates of the buyout firm Kohlberg Kravis Roberts; and Ottimo Funding, an affiliate of Aladdin Capital Management, an investment manager in Stamford, Conn.
more at NYTIMES

Nikkei now at 16,596 ("The Mar-07 16600 support level for the Nikkei 225 of the very important Japanese market is the critical one to watch this summer. I set mental stops no worse than -8 pct from the cycle high, which, in the case of the Nikkei 225 index just happens to be near the 16600 technical support level. If violated, I would be out...")...

hoping for a "successful retest," but if breached, i have no problem moving the "port" to cash if the consensus call on this blog turns bearish...

"Be smart, make your own decisions and allow for an ample margin of error. The time to practice our lessons learned is right here and right now."

-Todd Harrison, August 14, 2007

if you've made money on the long side, why not lock in your gains and keep your position sizes small playing the end game?

...and if you don't like playing the end game, step aside for awhile...there will be many opportunities after the dust settles...

According to The Big Picture, the money market funds are 'enhanced' funds that don't have the same protection ($100k deposit insurance) that others do. These are higher risk vehicles for "accredited investors"

http://bigpicture.typepad.com/

I guess you learn something new every day.

The important thing is what's real in this market and what's hype.

This is a really motivational column, if a bit dated with it's value-investment approach, and still doesn't convince me to buy Coke stock.

http://tinyurl.com/2u46cw

Any bids on whether Chavez will release a 3 year old environmental permit to KRY? If the stock price was good this morning it's great this evening. :)

Bank stocks could be getting a bit cheaper tomorrow...

Re: BMD

Not sure how it works elsewhere, but here negotiations take place between the unions and companies on a provincial scale. I.e. unions don't sit with individual companies, rather a committee made up of representatives from industry/companies.

Negotiations are close to wrapping up. 3/5 major unions have reached agreeement, seems like the first usually set precedent for the rest.

"As of Aug. 10, the plumbers and pipefitters, millwrights and refrigeration mechanics all now have memorandums of agreement, unratified," stated Salmon. Members will be voting on those proposals shortly. "Negotiations are continuing with the other two today."
The remaining two unsettled trades are electrical workers and boilermakers."

http://tinyurl.com/2ylczx

thought i'd comment as i actually have some local insight :) Come to think of it, BMD's pit is prob 1 hour drive from my house...

Divergences on my charts suggesting AN ATTEMPT to form a bottom, despite weak price action. Unless and until headlines resolve, this market will remain under pressure. Simple as that.

Someone asked what I thought of gold here. I think gold is great fundamentally. The charts tell me something else is going on. Until I get a handle on THAT I prefer not to catch falling knives.

Good luck and good trading.

wavesmash: referencing your post of late last night--Money market funds in the U.S. do not have FDIC $100,000 protection. Only bank accounts do. Most MMFs hold commercial paper & asset-backed commercial paper, unless they are Treasury Only MMFs. S&P's announcement late yesterday that it was considering downgrading some CP indicates that they are more on top of this than they had been with the mortgage implosion--of course, they have to be. Their rep has taken such a hit. The four issues in question are held in the following MMFs:
(from NYTIMES article referinced above @10:09 p.m.)

"Among the money market funds that held commercial paper issued by the companies singled out for possible downgrading were two offered by Evergreen Investments. As of May, the $16.6 billion Evergreen Institutional Money Market Fund held $385 million in Broadhollow Funding and $72 million in Ottimo Funding. The $4.5 billion Evergreen Prime Cash Management Money Market Fund held $50 million in Ottimo Funding as well.

A spokeswoman for Evergreen declined to comment.

Legg Mason’s Master Portfolio Trust Liquid Reserves Portfolio, a $52.5 billion fund, owned almost $200 million in securities issued by Ottimo Funding and $750 million in KKR Atlantic Funding.

Mary K. Athridge, a Legg Mason spokeswoman, said in a statement: “The holdings represent less than 1.4 percent of the portfolio. We believe the current disruption in the marketplace is liquidity-related rather than credit-related, which the Fed has stepped into the market to address.”

As of May 31, Columbia Funds Series Trust Cash Reserves, a $62 billion fund, had a $120 million stake in Ottimo Funding and $400 million in KKR Pacific Funding Trust. A Columbia Management spokesman did not return calls for comment.

“If the stigma of mortgage-related extendable-asset-backed commercial paper spreads to asset-backed commercial paper as a whole, you could see bailout events,” said Peter G. Crane, president of Crane Data, the publisher of a newsletter about money market mutual funds. But he added: “The stuff that the money funds are invested in are the highest quality, so it’s the last thing to have trouble.”

However, the investment strategies that once were considered conservative no longer are."

///////Hmmm, "only" 1.4% of a Legg Mason MMF...And the spokeswoman raises the question of illiquidity vs. insolvency, which has been discussed here.