quote "AIG said in regulatory filings that about $9 billion of the markdowns on mortgage-backed securities resulted from temporary market-value declines that it expects to be reversed. Those unrealized losses don't affect earnings."
What is meant by "temporary market-value declines that it expects to be reversed"?
Many institutions hold mortgage products as an investment. To get a sense as to the current value of these holdings, they assume what they could get if they were to sell these things today. AIG did this and, if they were to sell these investments today, they would recieve 9B less than what they paid. Well, now may be the worst time to sell these things. AIG believes the market will recover and the value of thier holdings will appreciate to their original value.