Taking a bearish view of the US housing market should be a no-brainer. There is sharply declining house price appreciation across all local housing markets and housing indicators such as starts, sales and mortgage applications are all showing declining trends. But try telling that to a CDO manager. These vehicles have been buying so much triple-B home equity loan (HEL) paper that they now account for 80% to 90% of all buyers at this level.
This bullish demand is such that CDOs are...
