Josh Rosner, Graham Fisher: leverage amplifies losses
As Josh Rosner, an expert on mortgage securities at Graham Fisher in New York noted in a research piece last week, the leverage used to put such securities pools together can amplify losses. For example, a 4 percent loss in a mortgage-backed security held by collateralized debt obligations can turn into almost a 40 percent loss to the holder of the C.D.O. itself.
July 29, 2007
Fair Game
Summer School for Investors Is in Session
By GRETCHEN MORGENSON
It's still summer but as the financial markets declared last week, back-to-school season for United States investors has arrived.
With the equity markets off sharply for the week and the credit markets seizing, investors are being forced to relearn some of the basics forgotten during the private-equity, easy-credit, corporate-buyout boom of recent years.