HEDGE EXPERT SAYS MOST BANKS NOW INSOLVENT
FINANCIAL TIMES:
A Californian hedge fund has made more than 1,000 per cent return this year by betting against US subprime home loans, making it one of the world's best-performing funds of all time....
...However, Mr Lahde, whose fund is one of the smallest specialists shorting subprime, has now begun to return money to investors, telling them in a letter: "The risk/return characteristics are far less attractive than in the past."
In his letter, Mr Lahde said he expected the collapse in value of subprime mortgage-linked securities to be repeated for bonds backed by commercial property loans in a deep recession � which he also predicts.
"Our entire banking system is a complete disaster," he wrote. "In my opinion, nearly every major bank would be insolvent if they marked their assets to market." He also said he would be putting some of his own profits into gold and other precious metals...
[*] <http://www.ft.com/cms/s/0/7b6160be-9b80-11dc-8aad-0000779fd2ac.html?nclick_check=1>
Of course, gold has already spiked to $825/oz so it may not go too much higher... but we know one thing, that unlike the dollar, it is unlikely to go down, or even worse, unlike some banks, disappear altogether.
Are the banks next?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDdJ4GDZ6eao&refer=home
FINANCIAL TIMES:
A Californian hedge fund has made more than 1,000 per cent return this year by betting against US subprime home loans, making it one of the world's best-performing funds of all time....
...However, Mr Lahde, whose fund is one of the smallest specialists shorting subprime, has now begun to return money to investors, telling them in a letter: "The risk/return characteristics are far less attractive than in the past."
In his letter, Mr Lahde said he expected the collapse in value of subprime mortgage-linked securities to be repeated for bonds backed by commercial property loans in a deep recession � which he also predicts.
"Our entire banking system is a complete disaster," he wrote. "In my opinion, nearly every major bank would be insolvent if they marked their assets to market." He also said he would be putting some of his own profits into gold and other precious metals...
[*] <http://www.ft.com/cms/s/0/7b6160be-9b80-11dc-8aad-0000779fd2ac.html?nclick_check=1>
Of course, gold has already spiked to $825/oz so it may not go too much higher... but we know one thing, that unlike the dollar, it is unlikely to go down, or even worse, unlike some banks, disappear altogether.
Are the banks next?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDdJ4GDZ6eao&refer=home