I think it is very significant.
The buyers of toxic MBS apparently have a right to receive proper documentation of the garbage they bought. The foreclosure mess is all about crummy documents, ergo, they are no doubt now looking at ways to weasel out of their purchases, not that I blame them.
And if they are going to get sued for improper documentation, why not sue them for all their misdeeds? Hell, I would. Throw the kitchen sink at 'em, why not. With the NY Fed suing them, I would think there would be no chance of a TBTF bailout this time.
What does this do to CDS backing up the crummy stuff? I do know that a lot of it was written by AIG and has a long time to run. What the status on the AIG 'insurance' might be now, I don't know, but they are not the only ones who were counterparties on CDS.
Who knows.
But considering that there was a lot of crummy documentation not only from BofA but many others and therefore a lot of crummy MBS and a lot of CDS, even synthetic and redundant ones, the possibility for havoc is really, really good.
Reason I am looking at SKF, thinking about the timing for a move.
Oh, and there is still a lot of commercial RE still to go kablooey, too, so SKF might be very viable soon. |
