Global banks and finance firms have reported losses of about US$410 billion on securities tied to US subprime mortgages. Japan’s Fukoku Mutual Life Insurance Co said there’s a risk those losses will spread and said investors should put their money into government debt, recommending Germany or France.
Mizuho Asset Management Co, which oversees the equivalent of US$37.5 billion as part of Japan’s second-largest bank, said the firm holds no Fannie Mae or Freddie Mac debt and would not be bidding at yesterday’s Freddie Mac’s auction.
“We are concerned about the US housing market, so we don’t have any agency debt,” said Hiromasa Nakamura, a senior fund manager at Mizuho in Tokyo. “It will be a difficult auction.”
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