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  • peter_norths_proctologist peter_norths_proctologist Mar 3, 2007 3:29 PM Flag

    and REMEMBER this

    Re: Goldman Sachs, Merrill Lynch, et. al.

    "...These guys have made a lot of money securitizing mortgages over the years in a mortgage boom time," said Richard Hofmann, an analyst at bond research firm CreditSights Inc. in New York. "The question now is what is the exposure to credit risk and what are the potential revenue headwinds if they're not able to keep that securitization machine humming along."

    Excellent find, Lumatic. I agree, OPBL is guilty by association because of their similarly large stake in junk mortgage securities, which happens to be undermining the value of the big brokers.

    "...Bear Stearns's stake in non-investment grade retained mortgage securities, or what its keeps from packaging loans into bonds, represents about 13 percent of the firm's "tangible" equity, according to CreditSights."

    "For Lehman, it's 11 percent. Goldman, Morgan Stanley and Merrill don't disclose how much of their total retained securities are rated below investment grade, or junk. Overall, their exposure is in ``the low- to mid-teens," CreditSights said."

    The article didn't mention the percentage of OPBL's stake in non-investment grade retained mortgage securities. But I'm sure it must be similar in size, because after all, it is a broker. Again, thanks for the help lumatic. You're a godsend.

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