It’s not a secret that the major investors into U.S. mortgage-backed securities (MBS) are the Foreign central banks (FCB). And it’s not a big secret either that most of the $800-billion U.S. current account deficit is founded by oil-digging nations (not China, as many still think).
Mish posted today the simple tricks that Freddy Mac is using to make bad loans look good. Good enough to make FCBs to invest into MBS.
Here is the portrait of a typical major real estate investor who is keeping our economy afloat.