(Bloomberg) -- James E. ``Jimmy'' Cayne helped make
Bear Stearns Cos. the mortgage king of the securities industry
by packaging home loans into bonds and selling them to clients
like Michael Vranos. Now Vranos, who manages $29 billion at
Ellington Management Group LLC, is cutting Cayne out of the
middle and buying mortgages on his own.
On Wall Street, they call that disintermediation, and it's
eating into almost $9 billion of fees that firms including New
York-based Bear Stearns earn from securitizing mortgages.
Instead of buying such bonds at markups of 1 percent or more,
hedge funds expect to make better returns by taking over bad
debts and pressing borrowers to pay up.
Read more at Bloomberg Bonds News
Bear Stearns Cos. the mortgage king of the securities industry
by packaging home loans into bonds and selling them to clients
like Michael Vranos. Now Vranos, who manages $29 billion at
Ellington Management Group LLC, is cutting Cayne out of the
middle and buying mortgages on his own.
On Wall Street, they call that disintermediation, and it's
eating into almost $9 billion of fees that firms including New
York-based Bear Stearns earn from securitizing mortgages.
Instead of buying such bonds at markups of 1 percent or more,
hedge funds expect to make better returns by taking over bad
debts and pressing borrowers to pay up.
Read more at Bloomberg Bonds News
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