Norway's $570 billion sovereign wealth fund sold all its holdings in U.S. mortgage-backed securities as part of a shift of its fixed-income portfolio.
"We've reduced our holdings of mortgage-backed securities," he said. "MBS has been taken out of our internal policy benchmark. This means that we don't have mortgage-backed securities issued by Freddie Mac and Fannie Mae any longer."
The debt was sold primarily because of the refinancing risk, he said. In the U.S., when a borrower refinances a mortgage it can cut short the maturity of the bond backed by the loan and reduce the expected interest over time, so-called prepayment risk.
The "good reason" for this move here, I would suspect, is not the "real" reason; we are looking at an even more profound meltdown of the American mortgage and housing industries, and Norwegian government analysts have had the foresight to make what will probably ultimately be a good call for the country.
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/28/bloomberg_articlesLTRWRC07SXKX.DTL
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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