What happened when you started to see all the wolves in the subprime market and you started to see so many people going into default is that the credit market has tightened up.

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On a break-even basis, this is basically saying that you would start losing money if you started to realize more than a 13% annual default rate for the next 5 years, if you had lower than the historical recovery rates of 40 cents.

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Falcone only started the fund last year to take advantage of companies already in default, under bankruptcy protection or appear on their way down that path.

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Efforts to restructure the debts that caused the biggest sovereign default in history have not even started and the first bondholder has already sued in a New York court.

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