Oct

1

?Mark Cuban was on one of the business channels last night promoting the idea that all the toxic mortgage backed securities be rolled up into a giant publicly traded ETF. I'd have to guess that with so much forced selling, the most distressed mortgage backed securities must be good buys, yet there doesn't seem to be any vehicle for regular folks to participate. Is there something out there that I'm missing?

Rocky Humbert offers:

I like these two closed-end funds: HSM (Hyperion Strategic Mortgage) and HTR (Hyperion Total Return). They are both at steep discounts to their NAV, they are managed by Lew Ranieri (the father of mortgage backed securities… Liar's Poker, etc.), and they have quality assets which have been dragged down by the sector collapse. If you are looking for true toxic waste, then consider RMA, RHY, RSF and RMH. These closed-end funds were previously managed by Morgan Keegan, and Lew Ranieri agreed to manage them after the meltdown (and lawsuits).

George Parkanyi adds:

UYG on the Amex — the ProShares 2x Financials ETF. It is loaded with US financial companies, which in turn are arrayed with every imaginable kind of toxic debt to suit your fancy. It’s not a toxic debt pure-play but if you can move past the token deposit-taking and convential-lending distractions, these guys have simply astonishing toxic debt franchises.


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