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

To: Think4Yourself who wrote (110855)	3/17/2008 9:13:26 AM
From: Hawkmoon	Read Replies (3) \| Respond to of 306849

It's all rated AAA and it's mostly garbage. If the AAA stuff is garbage, what is the rest worth? So long as mortgage payments continue to be made, and interest passed on to the MBS', how can it be declared "garbage".. It well may be garbage, if homeowners mail in their keys and walk away, but people have to live somewhere.. and even if they opt to rent, someone owns that property, right? Declaring even the AAA instruments to be "garbage" indicates an expectation that 100 million Americans are going to turn their vechicles into permanent mobile addresses.. And I don't think that's a reasonable expectation. Isn't this why Bernanke effectively told the banks to just suck it up and write down 50% of their mortgage loans so that a baseline is formed for the valuation of these mortgages? Certainly far preferable to just taking wild @ss guesses and declaring that, over 30 periods, 100% of all mortgages are going to default. Hawk