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Strategies & Market Trends : Value Investing
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To: pcyhuang who wrote (28332)10/1/2007 9:44:12 AM
From: Spekulatius  Read Replies (1) of 78470
 
pcyhuan, while I understand that "contrarian alert" was a buy recommendation it's really hard to tell from you post only.

I looked in your markitsource link you provided. Only the tranches better than A have recovered anything below pretty much trades at or near the lows. Even now some AA tranches still trade at 80c on the $. have you calculated how much E*Trade has to write off if they have to market-market their mortgage book at these prices?

from you letter:
Quote: "It showed $690 million in unrealized losses in securities held on its books at the end of June, a vast majority in mortgages."

But do you realize how much the mortgage market has changed since then?

At the end of June, the mortgage market as represented by the ABX indices was in a very distressed state, with many series
of mortgages having locked market prices -- offers were locked on the bid, no spread existed between the two.

But have you noticed the sharp improvements in the liquidity and pricing of the mortgage market since then?

markit.com
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