FrontPoint Partners said in a Thursday conference call with investors that the subprime mortgage markets freefall is a sheer calamity unfolding on the broader credit markets.
Until now, many investors have viewed current subprime credit problems as contained, FrontPoint executives said. But with an estimated $650 billion in subprime mortgages set to readjust to higher interest rates, the firm expects to see far greater waves of defaults.
Investor sentiment is now beginning to go against a variety of markets unrelated to subprime, FrontPoint said. I think what is happening is that we are getting a complete repricing of