From Finalternatives.com: After his residential real estate and commercial real estate hedge funds gained whopping 1,000% and 80%, respectively this year, Andrew Lahde is launching a new hedge fund to further capitalize on the credit crunch. The new vehicle, the Short Credit Fund, will invest primarily in credit default swaps on various asset-backed securities or the indices that reference these securities, according to fund documents obtained by FINalternatives. The fund, to be launched by Lahde Capital Management next month, will also enter into credit default swaps referencing money center banks and broker-dealers. The fund plans to short debt-related instrument via CDSs including the CMBX indices, the CDX indices, the LCDX indices and securitizations backed by automobile and credit card debt. http://www.finalternatives.com/node/2989
My thoughts exactly. Maybe not today, maybe we'll have some more panic seling before people figure out how much most of that paper is worth, but ETFC... they sold a multie billion dollar potfolio for pennies on teh dollar. However, we don't know how bad it is. We'll head wherever the manipulated news and s&P futures tell us.
So the last trade was 27 cent on the $, do you really think that the rest of the junk is being similarly valued? Ofcourse not, they are calling ETFC a special situation. Perception and reality are still far apart, probably 35-50c worth on average. This is because the housing bubble is popping very slowly. Where properties have run up 300% in the last 6 years coming off 15% is not much of a pop.
"I was in this game for the money," Lahde wrote in the two-page missive, saying he would now focus on his personal portfolio of unspecified millions. "The low-hanging fruit, i.e. idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Bros. and all levels of our government. "All of this behavior supporting the Aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America." http://www.latimes.com/business/la-fi-hedge18-2008oct18,0,4226335.story