Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: saveslivesbyday who wrote (109130)	3/18/2008 11:30:22 AM
From: Les H	Respond to of 306849

The Fed's decision to allow AAA-rated mortgage securities to be posted as collateral raises some interesting political questions. It's very hard to imagine that S&P and Moody's will implement a wave of downgrades any time soon, because this would completely undermine yesterday's actions from the Fed. As yesterday's excellent article on Bloomberg explains, none of the 80 AAA securities in the ABX indices (these track subprime bonds) meet the ratings agencies' normal AAA criteria. Helicopter Ben is loading up with assets that are very heavy in risk. This is alleviating the liquidity pain of the financial system, but is risking his ability to pilot the Fed. If these AAA assets start to turn sour, then the Fed will be yet another bank burdened with the woes of the US housing market. bondvigilantes.co.uk