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To: XoFruitCake who wrote (109290)	3/12/2008 11:07:09 AM
From: Think4Yourself	Respond to of 306849

I have been thinking of the ABX manure pile. IF the stuff is insured, and I don't know if it is, the monolines will pay on defaults. The monolines are regulated/controlled by the New York government. I guarantee that Dinallo is ensuring that the money they have for payments doesn't disappear into the holding company. If a monoline defaults on an ABX payment FOR ANY REASON the state will IMMEDIATELY step in and take over that monoline. The fed has probably already ensured Dinallo is on top of this. Willing to bet that the senior managements of the monolines have already been told what securities they will under no circumstances default on. Payments on ABX defaults are guaranteed to be made IF they are insured.

To: XoFruitCake who wrote (109290)	3/12/2008 11:40:14 AM
From: neolib	Read Replies (2) \| Respond to of 306849

Even if you think the MBS is worthless, if Fed let them keep the loan of the next 4-5 years, banks will be able to use the 200B with low interest rate and make back enough money to pay for their loss. I think the Fed should give me a low interest loan instead. Why give it to those dufuses? I'd like to make some money off of it as well. I won't pay myself $10-50M/year like those bank CEO's do either, so I must be more deserving. I didn't note the Fed having any problems when the slicers and dicers were raking in all the fees associated with causing this mess. I do note with much amusement that some who nearly choke at the word socialism when it comes to profits, now think socialism is God's gift to America when it comes to losses. Also, since markets are supposed to be all wise, and the government only screws things up, why are we embracing the government to correct a market problem. LOL!

To: XoFruitCake who wrote (109290)	3/12/2008 1:39:01 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 306849

>>"I don't think we're that much in disagreement except for your categorization of the Fed allowing MBS to be used as collateral is a long term positive"<< Under the scenario as described (unlimited rollover of long term loans), you're simply avoiding the recognition of bad debt. Money is created underwritten by securities that may well be valueless. This is tremendously inflationary, particularly if the whole 200 billion is submitted (and I have no reason to believe it won't be). You've basically devalued the dollar, and taken the devalued fraction and handed it to the primary dealers (who've mismanaged the job of lending and now have no real incentive to change business as usual. Now the know Uncle FOMC will be there each and every time to pick up the pieces if a loss rears its ugly head). This is precisely what the Japs did 1990-2000, and it's the main reason their downturn stretched out into the decades. If primary dealers are bankrupt they're bankrupt, it's not a question of wanting it, it's a question of what is. If they act stupidly, perform badly and lose in competition they deserve to die! Someone else (who was smarter and better at what they do) picks up the pieces and moves on, it's the cornerstone of a competitive economic system. Free enterprise as opposed to Socialism if you will.... Inflation may be good for stocks on a nominal basis, but dollar devaluation has kicked the S&P's ASS this entire decade with more in store.....