Well put. At some point, the market structure/complexities intended to provide a benefit, became too difficult to manage and too easy to exploit. It's a tough balancing act.
Was going to comment on your MBS statements, but this report has much better analysis:
BBB corporates vs. AAA RMBS seem to have similar credit spreads (07/2008).
Certain credit enhancements would make AAA RMBS/AAA corporates equal risk.
AAA corporates have a default rate of 5 out of 10,000 - 07/2008.
P.S. For the ggparent comment, here's a decent (from 2002) summary of pension fund investment restrictions by country:
Was going to comment on your MBS statements, but this report has much better analysis:
http://books.google.com/books?id=w9jIQuZIWPUC&lpg=PA59&#...
P.S. For the ggparent comment, here's a decent (from 2002) summary of pension fund investment restrictions by country:http://docs.google.com/viewer?a=v&q=cache:AdQpJCAi2wUJ:w...