Yes, I agree, that is has been presented and reported on all over the country. You are right, it is not a secret. But you know, after a few months everybody has heard it and since it hasn’t hit yet, they kind of think how bad can it be. After a few months of a break, even I don’t believe in it anymore emotionally, maybe it doesn’t happen at all. But then you go back to logic and go over the numbers and then you realize everybody is just numbed from the news. The people around me still want to buy houses, they still think it will go up next year. ARMs are still going to reset. Lenders are still writing credit at ridiculously low rates, and people still invest in mortgage backed securities, since it’s the best deal around. The best of all are the banks who offload all these bundled mortgages to wall-street, and then their next door collegue in the investment department buys all of them back by investing the bank’s and client’s money in them.
Sorry for the rant, but “nothing is over” yet, and nobody in his gut believes anymore that it’s going to matter. It hasn’t so far so why bother.
But on a different note. Hedge-funds also invest a lot into MBS and derivatives. I heard they are not doing very well this year. (Besides Refco, GM-bonds, Amaranth, and Vega)
Have they improved a lot with the latest rally? What are their typcal returns YTD?
