SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (75998)3/12/2008 1:04:53 PM
From: carranza2  Read Replies (2) of 116555
 
OK.

But with MBS pledged as collateral, I wonder who has the right to call for any outstanding CDS to pay up?

This to me is the serious risk, i.e., that the banks who are also counterparties on CDSs 'insuring' payment on MBS on default will get hammered when defaults occur.

If the Fed now has the right, it could absorb the losses - which are almost certain - or not call upon CDS counterparties - the same stupid banks it is rescuing - to pay up since calling for payment will exacerbate the problems it is trying to cure. And exacerbate it in a big way, I think.

I don't know, the Fed ought to just give everyone with a mortgage in arrears a check, probably cheaper in the long run. vbg
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News