Exotic credit-linked securities have been the downfall of too many brand name investment banks as of late. But that spells opportunity for one boutique that carries the name Morgan Joseph--which was founded by Frederick Joseph, who some of you will recall was the former CEO of Drexel Burnham. For now, it seems the firm is doing a bit of market making, but it is convinced that the market will not only stabilize but come roaring back. At that point, they are hoping for a bevy of new deals "that probably will be less levered and tailored for a specific pool of investors," notes IDD. When it comes to valuing subprime mortgage debt, the firm has developed models that focus on debt-to-income ratios in the underlying loan pools. The firm believes that those who can still make payments and can afford their homes will stay current on their loans, even if home prices drop in value.

For more:
- here's the IDD article

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