High quality mortgage paper got overlevered, and even though current market prices are attractive to
unlevered buyers, there is the short - term risk that more players will be forced to delever.
Not exact matches
Rationality will return when
unlevered and lightly levered
buyers, or
buyers with long liability structures (looks at the actuary) hold their nose, and step up and buy with real money, not short term debt.»
This raises the risk of a self - reinforcing move that will only end when
unlevered and lightly levered
buyers soak up the high yielding safe assets that couldn't find a home elsewhere.
This can temporarily self - reinforce falling asset prices, until
unlevered (or lightly levered)
buyers find the returns from the assets to be compelling.
Rationality comes back to these markets when «real money
buyers» appear (pension plans, insurance companies, wealthy dudes with nose for value), and these non-traditional
buyers soak up the excess supply of investments that are out of favor, and do it with equity, at prices that make the
unlevered return look pretty sweet.