Has the Mortgage Bond Market Capitulated? Rush to "safe" assets. Going on 8 months of straight selling in CDO's. ABX indices totally trashed with BBB's in single digits and AAA in the 50's. Leveraged Fixed Income players blown out on margin calls. Almost all Mortgage companies out of business or near zero. Banks hoarding cash. Walking away from Mortgage market. Financials in 9th month of decline. SIV's forced back on bank balance sheets. Bond Insurers, Rating Agencies credibilty questioned. The hot new themes are Risk Aversion and Deleveraging. Cash Players entering market - Pimco, Wilbur Ross, Buffett. Capital raised, New funds open to buy "distressed" debt. opinions?
I have over $1billion worth of sub prime mortgages that I'd love to sell, most of them from people who have good to excellent credit, have been paying on time etc. No one is willing to buy even at 50 cents on the dollar right now. I really really really wish the bond market would bottom here, hell even bounce, because if it does I stand to make several million dollars, but at this point its just hoping for change and changing for hope...or something like that, wishful thinking might be another term.
One quick point to make so there is no confusion. I personally do not own $1billion worth of subprime mortgages, or anything else for that matter. I have been though involved with a company for some time that markets CDO's and other forms of debt between banks, credit unions, mortgage companies etc. So, I'm simply an agent in a transaction (a broker I suppose).