Another Down Day in PrimeX

OK, so I'm going to watch this thing, now, it has my attention. We have another down day for all Prime X Indexes (click on link for current).

12-Oct-11 Overview
Index	Series	Coupon	RED ID	Price	Factor
PRIMEX.ARM.1	1	0.0442	7B579YAA3	99.714 [-.098]	0.408221747
PRIMEX.ARM.2	2	0.0458	7B579YAB1	87.732 [-1.31]	0.436699618
PRIMEX.FRM.1	1	0.0442	7B57AKAA1	103.786 [-.074]	0.468172369
PRIMEX.FRM.2	2	0.0458	7B57AKAB9	92.768 [-.107]	0.488982221

The numbers in the brackets ([-.###]) indicate the change from, yesterday (Oct 11th).

More information I found on this topic:

• Zero Hedge blogs about European Banks selling assets (to improve capital on the books) and Prime X CDS are a large share of those assets.
• Financial Times Short View column points out that the markets are highly correlated.

It looks like EU Banks are under pressure to raise the amount of capital held on their books and are, therefore, selling assets including CDSs under PrimeX.  Does this create the selling pressure on that index and is that solely responsible for its drop?  That is, classic oversupply, little demand?

The FT article doesn't talk about this area of the market, directly, but is perhaps me being subject to me simply looking for facts that support my worldview.  Someone says the US market is getting highly correlated, meanwhile indexes critical to MBS are dropping.