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Strategies & Market Trends : Portfolio Construction -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (594)	8/27/2007 2:43:49 PM
From: Keith Feral	Respond to of 1964

I agree with you 100%. It's a total shame to see the FED misuse monetary policy to ruin competition in the financial industry so that only the strong survive. Had they stepped in back in the Spring, they would have saved alot of mortgage companies from bk. Now, the big guys are withholding liquidity to force margin calls against all the smaller mortgage lenders to liquidate their positions. Now, they can step in and buy subprime mortgages at 40 cents on the dollar, sell the homes out of foreclosure for 70 cents on the dollar, and rewrite the new paper for better rates. It's a no brainer to start accumulating the big money center banks now that everyone has dropped their guard. Also, think about the way banks will share the spoils with private equity as they renegotiate all the LBO paper. I think this is one of the greatest snowjobs of the century.