Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

BullDawg....

Many mortgages are quickly packaged in groups, insured against loss, and sold as mortgaged backed securities for which there is a large market. The one I watch most closely (and think is a very good short) is MBI, a company that insures the packaged mortgages. This is a little known area that could threaten our bond markets, because these insurance companies insure not only mortgages but many other types of loans, and there is a very thin amount of assets to cover all the risk outstanding. These companies are already being hit by ENE, WCOM, GX, and a number of international loans, and there is stress on their assets.

For those technically inclined, MBI's chart is in a very interesting triangle pattern with sharply contracting bollinger bands. It is likely to move sharply one way or the other, and my bet is on the downside.

Good luck to you.

mlsoft