Mortgages Give Wall St. New Worries

New York Times - June 19, 2007
By Vikas Bajaj and Julie Creswell

EXCERPT

“Basically, Bear is trying to prevent the great unwind of their fund,” said Janet Tavakoli, president of Tavakoli Structured Finance, a consulting firm that helps investors gauge risk. “The reason people are watching this carefully is because they’re wondering whether this is going to lead to others doing the same, or will this be contained.”

But Ms. Tavakoli and other industry specialists noted that the housing market moves slowly, much more so than, say, the stock market. Also, subprime mortgages are packaged in securities that are structured to withstand relatively high rates of default before most investors lose any money.

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