Here is a news report from August 2, 2007 that we wonder about. Mortgage BLues will monitor this situation closely:

Prudential Financial Inc., the second- largest U.S. life insurer, said it’s still buying securities backed by subprime mortgages and expects turmoil in the market to cost the company no more than $150 million over five years.

Prices of some subprime securities rated AAA and AA are now “disproportionate to the underlying risk and are primarily liquidity-driven,” Prudential Vice Chairman John Strangfeld said on a conference call with analysts today. “As a consequence, we see selective opportunities to take advantage of that.”