It wasn't so much that they didn't have MBS to sell, per se, it's that investors were looking for returns that they couldn't provide on an ongoing basis (there was a pretty large spread being demanded between that and Treasuries... almost 3%, I think?). Capitalization was bending pretty hard at the end; and I think both were already fairly heavily leveraged.
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timeasmymeasure
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Date: 2008-09-08 06:45 pm (UTC)It wasn't so much that they didn't have MBS to sell, per se, it's that investors were looking for returns that they couldn't provide on an ongoing basis (there was a pretty large spread being demanded between that and Treasuries... almost 3%, I think?). Capitalization was bending pretty hard at the end; and I think both were already fairly heavily leveraged.