you have to wonder if jpm is taking the other side of this trade, on the other side, if it's to be a bonafide investment for jpm,you can probably expect some new tax breaks in rental property depreciation implemented by thier employees, wasington DC
This is a bullshit blog. It's full of hyperbole and empty on analysis. What the article fails to miss is that if the investors are right, they will get a 6-8% coupon but will be entitled to the value appreciation in the house. Mortgage bonds won't offer him that. JPM is creating a fund that caters to an envogue strategy. All major firms do this. In 2009 many major funds were creating tail risk hedgefunds and long only convertible bond funds as investors were eager for those strategies.
The idea of buying houses is popular right now. A lot of other PE shops are creating funds to invest in brick and mortar houses. Eventually this fad will go away and all these PE shops will close these funds down. You see it happen every so often. In 2009 a lot of firms created long only convertible bond funds to exploit the fact that those bonds were trading with implied volatilities below zero. When the bonds normalized in price the firms closed those funds down. Tail risk funds have been popular as well. A lot of firms opened tail risk funds. Eventually investors will get tired of paying for tail risk protection and those funds will close down.
hyperbole not needed, google jpmorgan fined/sued/denies etc ..you wont find any articles on jpmorgan forced to liquidate and executives serve time