Re: [PEN-L] interesting quote

[C Ruiz]

In a message dated 5/5/2006 2:24:11 P.M. Eastern Daylight Time, [EMAIL PROTECTED] writes: Are hedge funds big holders of MBSes? Foreign central banks? If there is a massive housing bubble burst, with large numbers of foreclosures, who gets hurt the most (obviously all of the above players get hurt to some extent). Or is the exposure widely diversified? thanks. --raghu. Yep, HF's, big investment houses like Goldman-Sachs or Morgan, etc,all kind of money market funds and other financial institutions. Pension funds are only now gingerly traipsing into the business. foreign CB's are usually  forbidden to invest in any thing other than UST's.   The exposure is nominally diversified but concentrated in few big houses like Citicorp and Chase. It is all capitalist big money ,so not much to feel sorry for in case the "black swan" event shows up as it happened to LTCM and to a few HF"s recently when the GM convert-bonds went down. Pretty dangerous especially in the case of Synthetic Securities when the underlying security vanishes by the play of fundamentals. CS