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Assured Guaranty Ltd. Message Board

  • jjed88 jjed88 Dec 25, 2009 6:39 PM Flag

    Some of you more knowledgeable fellows...

    The FEDS are buying up a lot of the toxic sub-prime RMBS. I don't know if their making a dent in what is outstanding but I've read they have bought back over $1 trillion of this garbage. Wilbur has said, a few months agao,that the commercial mortgages could pose a significant problem.
    Is AGO's exposure to commerical mortgages where the worry is?

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    • The Fed has been buying mortgage backed securities, but I don't think they are anywhere close to $1 trillion. I think $200-400 billion is more like it.

      I have heard that 1 in 4 mortgages are upside-down. Defaults, foreclosures, etc. etc. are a huge threat and contibute to a list of non-performing assets on AGO's Balance Sheet.

      On the good side, AGO has been making very good progress on their loss mitigation efforts.

      AGO will probably be okay, but the bleeding needs to stop before 3rd quarter 2010.

      • 1 Reply to hounddawgie
      • I got the $1 trillion figure from a Seeking Apha article. I have no idea how accurate it is:

        ..."The entire "package" of Fed buying of Treasury debt to keep interest rates low runs in the hundreds of billions--The Fed’s balance sheet ballooned to $2.24 trillion in assets as of last week, up 142 percent from the beginning of 2008. The Fed purchased outright $300 billion of longer-term Treasury securities, $1.2 trillion toxic-garbage mortgage backed securities no sane investor would touch, and hundreds of billions more in Treasury debt via proxy buyers"....


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