lacklustre day for RAMS. i expected it to surge higher. i think...

lacklustre day for RAMS. i expected it to surge higher. i think some instos are still reducing their holdings.

countrywide, the biggest US mortgage lender, with huge losses from sub-prime exposure, that was expected to go bust just on thursday, was upgraded from sell to neutral on friday. this makes me extremely confident in rams because it has no sub-prime exposure and a much stronger credit rating than countrywide

all they have to do now is a securitisation and move away from XCP to RBMS. if you looked at the prospectus, the interest rate on RMBS is the 30 day Australian bank bill rate + 18bp and for XCP is the 30 day Australian bank bill rate + 12.5 bp

so we're talking about a contraction of 5.5bp in spreads by moving to longer term funding. no biggie. and the fed is expected to reduce interest rates by at least 25bp. the RMBS markets have not so far suffered contagion.