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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (107339)	2/8/2010 11:41:36 AM
From: Haim R. Branisteanu	Respond to of 110194

russ to compare apples to apples we need the following 1. the amount of total loss which will be transformed into Federal Debt serviced by future anticipated taxes 2. Present obligations whose collateral is below face value and there is no chance of recovery -e.g. selling the underlying assets in let say 5 years will generate a loss 3. Mortgage obligation which will be "refinanced" or pushed forward and the liquidation value is unknown All those amounts will add up to the Federal Debt My intuitive sense is that due to the slow recovery and fast deteorating value of the underlying assets the amounts could be substantial For example a home which is not taking care of properly its value degrades rater quickly so refinancing or pushing forward a mortgage does not enhance the collateral

To: russwinter who wrote (107339)	2/8/2010 5:52:39 PM
From: rich evans	Respond to of 110194

Where is the credit risk on the MBS held by the Fed? I bet these are secured loan where FNM and FRE keep the credit risk. Also FNM and FRE are now government owned. So their paper is = to treasuries basically. Finally FNM and FRE are earning together before loss provisions about 60bill a year. So in 10 years they will have earned back their losses. I read where the total mortgage market is more like 14 -15 trill instead of the 12 trill you mention. But whats a trill between friends. But still a very bad picture where time, time , time is the only medicine. Rich