A facade to obfuscate. Whadda joke.

‘bill gross makes huge bet that the US taxpayer is a sucker (picture cartoon taxpayer with a lollipop for a head)’

or

‘bill gross stands to make huge profits off american taxpayer’

i think the situation we are in sucks, but the profiteer vultures (read bill gross) who knew implicitly that the debt of the fannie and freddie was not guaranteed by the us government (read taxpayer) should be wiped out first. they have fully understood what they are buying and bank on the largesse of the treasure and the taxpayer.

there is very little justice in the world, but this would go a long way to proving that we actually may be on the right track.

This is a matter of time in general, as people look forward to valuation changes. This is a time where we are experiencing the results of stupidity and thus people assume that time will make this better..

The GSEs have guaranteed multitrillion dollar sums of market top debt. With the asset markets for the mortgage bonds they have guaranteed heading for a 30% decline at any realistic minimum, and potentially more, the impending losses are vast if someone, anyone were to try to pay off those guarantees. Even if the Treasury steps in and buys up all GSE debt at issue itself, this will do nothing to forestall that huge overhang of losses from existing claims. I think that the big players have finally come to understand this in the last two months; clearly the CBs have, since many of them are dealing with huge property asset price collapses in their own bailiwicks. As that overhang of losses sweeps down, the value of GSE debt is going to plummet even with government guarantees to GSE bondholders since the institutions themselves are effectively destroyed and claims of all kinds will exceed the available sums _in the near term at least_ so several somebodies’ financial claims will go under the bus. And frankly, the US simply does not have the dough to pay off the guarantees of the GSEs at par. This resolution is going to be extremely messy: who would want to hold the bonds of something that messed up, sovereign promises or not?

If the US pixelates digits to ‘pay off these claims,’ they destroy our currency and our debt. That’s an outcome no one wants. The logical solution, which I find ugly but realist, would be to guarantee GSE debt but repudiate their MBS guarantees, paying then latter off at a cramdown out of assets or otherwise finding a way to repackage those claims. That would be a major, major policy action, requiring Congress and the Executive to get a firm grip on things; the biggest public intervention of any kind since the 1930s. The present Administration just doesn’t have that in them. I don’t even know if it would work, but it’s a pragmatic way forward. . . . But again, if one looks at _that_ postulated ’solution,’ who in their right mind would want to buy more GSE debt as of today? Big players have money to place and currencies to consider, so they have to keep buying to certain levels—but they hate themselves for it, methinks. And a sudden buyers’ strike could happen mighty damn quick in such conditions.