[quote=CA renter]While I admire your superior knowledge about accounting and finance, I’m not sure about your claim that the Fed is buying at “real” market values.
Besides, when foreclosures are banned and/or artificially held from the market (keeping supply low), and when interest rates are “artificially” pegged to the floor (propping up the price of assets purchased with credit), can we really be sure of the market values of these securities?[/quote]
Sure we can. Market value is a price at which an asset is exchanged between willing buyer and willing seller, with neither side under any compulsion to act. There was a time when the MBS market was frozen, there were literally no buyers. That is not true today. They are actively traded, so they do have a market value. The Fed may be keeping interest rates artificially low. But within that paradigm, assets have a very real value.
And foreclosures are not banned, nor are they artificially being held from the market.
