Audrey's comment was on my mind when I stumbled across this "Investment Advisor" article.audreyh1 said:It's a pretty shocking article. Someone will be left holding the bag when mortgage holders default. Will it really just be the hedge funds and pension funds? I kind of doubt it.
I don't understand how people can be allowed to take on mortgages under these circumstances!
Here's their rosy sales pitch outlook on the sector: "Moreover, with declines in construction spending and new housing sales, new mortgage applications and refinancings will likely decline—thereby, creating a tighter supply and increasing their value as investments." Then they recommend a few mutual funds who invest heavily in MBSs.
So I guess it's not just institutions, pensions, & hedge fund managers-- it's us, too...