One of the supposed advantages of securitizing mortgages was that it allowed the risk of homeowners’ defaulting on their mortgages to be transferred from banks to investors. However, as the market for mortgage securities deteriorated, many banks ended up accumulating big inventories of these assets, some of which they parked in off-balance-sheet vehicles called conduits. “We knew that banks were creating conduits,” Don Kohn, the Fed’s vice-chairman, told me. “I don’t think we could have recognized the extent to which that could come back onto the banks’ balance sheets when confidence in the underlying securities—the subprime loans—began to erode.”

I guess it is time to hit the rack..
Nite pups! Sleep well when you get there..

nite pups

g’nite to suz and all.

thanks for hanging out with me tonight pups – lurk will be around to assist ya with anything needed.