golfgal, I think the confusion lies in the following from your previous post:

“MBS or any ABSs for that matter are tied to assets. Those assets don’t just vanish – we’re not talking about worthless bonds that are issues – they are backed -hence their name. The value of those assets may decrease, but they do not go to 0…”

Your statement might lead one to believe that you were trying to convince someone that there aren’t any MBS or ABS that are truly worthless. Obviously, this is incorrect, as I pointed out in my response to your previous post. Also, in the case of some Z tranches, actually, yes, “the assets just vanish,” for all intents and purposes.

Now, I think what you’re trying to say is that PORTFOLIOS comprised of VARIOUS tranches of MBS and ABS will not be worthless due to the presence of real collateral. I agree with you there. (But that’s patently obvious. In the same vein, I will point out that stocks won’t go to zero because there are real companies that underly their values.) But that’s not the point you made – unwittingly or not – in your previous post. Nevertheless, I think we’re on the same page now.