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strbear

Cdo Figures Could Be Twice S&p's Estimate?

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Christian Zugel of New Jersey-based hedge fund manager Zais Group, said in a note to investors last week that losses from residential mortgage CDOs could reach $60bn-$100bn, far more than the $52bn estimated on Monday by Credit Suisse.

“We believe we are entering a severe crisis, with potentially heavy losses for many market participants,” Mr Zugel wrote.

However the hedge funds have done OK

A $2bn fund run by New York’s Paulson & Co was the single best-performing fund, rising 39.95 per cent after fees in June thanks to its dedicated bets against subprime mortgages

But its now old hat and everyone is doing it

However, some managers are warning that so many hedge funds piled money last month into bets against subprime that it had pushed up the cost too far. “It is becoming the trade du jour,” said one manager.

More Bearfood at http://www.ft.com/cms/s/29f1691c-2f20-11dc...00779fd2ac.html

B)

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but at the end of the day, someone else (probably another hedge fund) is on the receiving end of these trades.

The sad thing is that more and more money is sucked into the world financial casino, rather than actually doing anything remotely useful.

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When you realise these banks make money for guessing the direction of change and the amount it really makes you wonder what that has to do with the real world - The City is great at making paper profits, paying huge short term bonuses whilst the economy goes down the pan - but thats the way of the world I guess - takes me back to the bullsh*t britain article in the Guardian - one of the best pieces I've read this year - the emporer's clothes are coming off and guess who will pay - the Sheeple ...

SB

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but at the end of the day, someone else (probably another hedge fund) is on the receiving end of these trades.

I suspect that its all so ghastly complex that the buck will finally stop with everyone's pension funds. True to form, its always the masss that get shafted, never these financial speculators... they're always long gone once the music stops.

Edited by sossij

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