Monday, January 25, 2010

The Debts of the Spenders: FDIC Considers Granting AAA Status to Mortgage Bonds

*Credit Gato.chan

Take special note of the last line in this article. Is this going to shape up as yet another "extend and pretend" solution to the credit crisis?

Or will this be a juicy opportunity for arbitrage traders to take advantage of the yield between low interest treasuries and higher yielding assets.

Do I hear another Bill Gross play on MBS?

“The FDIC is going to be a big issuer in the securitisation markets this year,” said Christopher Whalen, managing director of Institutional Risk Analytics. “This could lead the way in terms of recreating the securitisation market, as the FDIC deals could end up being the new template.”
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