While the rest of the marketplace sees mortgage-backed securities as radioactive, Ben Bernanke doesn’t-at least when taxpayers’ money is at stake.
That isn’t an April Fool’s joke. The chairman of the Federal Reserve thinks the Fed’s $29 billion loan to facilitate the fire-sale of Bear Stearns isn’t at risk because the collateral backing it has a high credit rating. He also said at a congressional hearing that the Fed’s financial adviser is “reasonably confident” the central bank will get its money back on those mortgage-assets-and may even profit.
