In a follow-up to our piece yesterday on the goings-on in the subprime mortgage market we have a number of items of interest. Before proceeding we do want to clarify and emphasize one point.
Just because hedge funds are doing deals with subprime lenders does not signify all is well in sector and that one can go out and buy the stocks. Indeed just the opposite may be the case. Hedge funds can cut deals with desperate firms, in a classic “vulture style” that individual investors cannot. One should therefore take news of these deals with a grain of salt.
Joseph Lazzaro of Theflyonthewall.com Blog on how hedge funds can serve to take on (subprime) risk that other investors cannot.
CNNMoney.com reports that hedge fund Citadel LP has purchased a sizable stake in Accredited.
Jennifer S. Forsyth in the Wall Street Journal how the subprime implosion could spillover onto a commercial real estate REIT.
FT Alphaville points to the subprime meltdown as a cause for a steepining in the yield curve.
David Altig at macroblog on the potential for subprime problems to spillover into the wider commercial banking sector.
Felix Salmon on how the media is covering the subprime mortgage meltdown.
David Leonhardt in the New York Times on how debt, and this case mortgage debt, has been miscast over time as a villain.
Caroline Baum at Bloomberg.com on how the subprime market fallout is playing out in Washington D.C.
That is admittedly a lot of news to chew on. The subprime story is going to continue playing out for some time to come. Stay tuned.