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I think understanding the domino potential of the quality of debt is extremely difficult. One has to be willing to read through a lot of 8-K's to get whether the company teeters on it's debt-to-capital fulcrum or has reasonable and safe leverage, even though the debt/equity or cash ratio may be identical. Standard price, income, earnings, cash flow, economic ratios and earning ladders fail to account for or display the consequences of missing criteria for staving off the dogs of debt calling in obligation.

Katrina's effects on Montpelier Re include not only the loss of equity but also the financial obligations incurred by the company to maintain capital/reserving ratios in order to be able to borrow at reasonable prices and to hold off lenders who could have otherwise forclosed.

US based airlines go bankrupt with such regularity that I have to believe there is virtually no scenario in which I would invest in one, directly or otherwise, including Southwest and JetBlue. What will happen to oil prices if Iraq's civil war spills into Saudi Arabia or Hugo Chavez decides Venezuela isn't going to sell oil to the US for a year? Doesn't seem worth the risk.

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