Bill Wexler's Trading Cabana Message Board

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Non-Tech : Bill Wexler's Trading Cabana

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To: RockyBalboa who wrote (1734)	3/13/2007 12:45:14 PM
From: RockyBalboa	of 6370

ACF, CCRT ... fess up! There is one hedge fund out, or 2 which apply manager marks to grossly overprices (yet untraded) certificates. For a decade or so this did work although they marked down their portfolio in 1998 and again in 2003 I think. Much of the portfolio consists of structured products created from mortgage loans. It seems they did not learn anything because this stuff is "illiquid" (a.k.a. not to sell at this price). Margin calls can tank the portfolio when lenders want to see some collateral. They are indeed lucky that the US treasuries did not spike too high - yet.

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