Prescient Mortgage Bond Portfolio Manager Closes Fund Because He’s Worried about the Market
WSJ had an interesting article last Friday on Nick Krsnich (Source Link).
Nick is a portfolio manager, who previously was the CIO of mortgage lender Countrywide Financial. He decided to close his hedge-fund for the second time in three years.
Here’s some of his juicy quotes:
“The opportunity wasn’t there anymore. I just couldn’t invest money for people at 4% or 5% yields” on mortgage-backed bonds
“predicts market price will continue to slump as the Federal Reserve becomes less active as a bond buyer”
“became outspoken critic of Countrywide’s push for market share..unhealthy embrace of risk..he left the company [before the melt-down in 2008]”
“The U.S. has been throwing more debt at a debt problem..I came out of Countrywide and if you give more debt to a person who hasn’t proven they can pay back the loan, it’s usually a situation that doesn’t work out well”
Here’s a thought. Maybe we should price money and loans based on someone’s ability to pay rather than some government manipulated priced fixed number?