(Bloomberg) -- Investors should use options on
interest rate swaps to protect against the risk that losses in
subprime mortgages dim demand for risky assets and increase the
yield premium on mortgage debt, according to Credit Suisse.
Mortgage-backed bonds guaranteed by Fannie Mae, Freddie Mac
and Ginnie Mae underperformed Treasuries last month by the most
since July 2003 as investors sought the safety of government
debt. The near collapse last month of two hedge funds run by
Bear Stearns Cos. that invest in subprime mortgage bonds and so-
called collateralized debt obligations has fed concern that
risky assets may falter.
Read more at Bloomberg Bonds News
interest rate swaps to protect against the risk that losses in
subprime mortgages dim demand for risky assets and increase the
yield premium on mortgage debt, according to Credit Suisse.
Mortgage-backed bonds guaranteed by Fannie Mae, Freddie Mac
and Ginnie Mae underperformed Treasuries last month by the most
since July 2003 as investors sought the safety of government
debt. The near collapse last month of two hedge funds run by
Bear Stearns Cos. that invest in subprime mortgage bonds and so-
called collateralized debt obligations has fed concern that
risky assets may falter.
Read more at Bloomberg Bonds News
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