Smart money calls the bottom of the market
For months the biggest impediment to recovery in the structured credit market has not been investors’ fear of defaults, but their fear of short term mark-to-market losses if CDOs fall further in price. Big asset sales, such as UBS offloading $15bn of US mortgage paper to BlackRock, will do a great deal to restore confidence that there is a realistic bottom to the value of securities and that it may be safe to buy.
UBSs announcement today that BlackRock, the US asset manager, would buy $15bn of its US subprime and Alt-A mortgage debt will bring cheer to the hearts of structured credit specialists.
This is not BlackRocks first signal that it believes there is value in some of the capital markets most
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