US CREDIT – Some short weak links in housing market
Tuesday, December 13, 2005 : PermalinkReuters – Credit investors are betting more and more that the weakest participants in the U.S. housing market may begin to falter as the Federal Reserve raises interest rates, market participantssaid on Monday.
Many hedge funds in recent months have been betting against the weakest participants in the housing market by shorting, or buying protection, on asset-backed securities tied to subprime home equity loans, dealers said.
“This is driven by hedge funds taking a view on interest rate increases and the cyclical nature of housing,” said Michael Fuhrman, head of electronic trading in North America at GFI Group in New York.