Bailout

They aren't bailing them out to save the companies, they are bailing them out to save our country.

 

Is there an advantage to having individuals buying them?

 

Is this a serious question? Having willing individuals take the risk instead of the government should be a slam dunk.

 

Sure it's a serious question. Why would an individual want to buy them? I know next to nothing about MBS's so I'm asking.

 

To make money. Removing or drastically cutting the capital gains tax would make them more appealling by increasing their profitabillity.

 

I think I'm confused here, I thought these MBS's were essentially worthless now.

 

That's what I gather too. I hope the Ass'les don't get caught up in partisan politics.

 

too late

 

Not all of them, just mainly the ones backed by subprime mortgages. Don't forget that most people are paying their mortgages. Those mortgages were also packaged into MBSs and sold. Those are still in the money I would think.

 

It's not that the underlying assets are totally worthless, it's that they're worth so much less than what they were originally purchased and held on the books for.

Financial insistutions have to mark these assets to market. But considering that no one is willing to step up on the bid for these assets (read: frozen fixed income/credit markets), no one knows their true worth and can't accuratly mark them.

That is going to be the issue once the legislation passes. How much is the treasury going to pay for these troubled assets. If they do not pay enough then they won't provide enough relief. Too much and you do end up passing a disproportionate amount to John Q. Public.