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New York

One Final Letter from New York

Amongst discussions we had last week, a growing concern over delinquencies within the subprime mortgage market raised its head. The $1.3 trillion subprime mortgage market, which is a bit more than a tenth of the overall US mortgage market, caters to home buyers with poor credit records or those who might have trouble paying off their mortgages.


Concern has been growing in the US as the yield …

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Fed on US housing: “gradual” cooling becomes “substantial” cooling

The Fed’s FOMC policy statement released last night was notable for a significant downgrading of it’s assessment of the US housing market. In a world where economists look for even the smallest changes of emphasis in the wording of the FOMC statement from month to month, the move from a “gradual” cooling in housing to a “substantial” one was enough to see short dated US Treasury bonds rally by … Read the article

Letter from New York Part II

Those who have read Jim’s note of this morning will be aware that he and I spent the latter part of last week in New York. Whilst the US economy dominated many a meeting and conversation another prevalent theme and concern was the leveraged buyout or LBO. Those familiar with our views will be well aware this is something that has concerned us as a team for sometime now. Flush with a record $172… Read the article

Letter from New York

Stefan and I had a research trip to see our New York counterparties at the end of last week. Two key themes emerged. Firstly, when we were there a year ago, many of the Wall Street strategists were cautious on high yield and investment grade bonds. But after a year of strong returns from credit – and especially risky credit – capitulation appears to be the order of the day. Not one strategist w… Read the article