Most of this crap is already written off, so as the Gov’t starts buying this toxic waste the prices will increase and the firms will make some money and have cash vs this toxic stuff on their balance sheets.
free money has a funny way of screwing things up: read this excellent article on the mexican banking bailout, which actually had the opposite of the intended effect: http://www.bloomberg.com/apps/news?pid=20601110&sid=a995IUbqAcaM
so how does this prevent foreclosures? what happens when the next wave of mortgage resets hit?
Well hopefully, banks will lend to each other which will drive down LIBOR which will help with the next wave of mortgage resets or have those jackasses that went with ARMs to move into a fixed rate…
so why can’t we modify mortgages and maybe write down some principal on neg ams. would that take too long? i feel like that’d be addressing the root of the problem more effectively and would make mbs easier to value.
bigwilly Wrote: ------------------------------------------------------- > Most of this crap is already written off, so as > the Gov’t starts buying this toxic waste the > prices will increase and the firms will make some > money and have cash vs this toxic stuff on their > balance sheets. No it’s not. Banks have taken writedowns, but they’re still holding lots of this crap at .70-.80.
what should AAA rmbs be trading at? is it in the high 50’s-60’s now?