“Excerpts below from a WSJ article discuss some of the basics of the SIV market and whether or not the bank bail-out (MLEC) will arrive in time. Stay tuned, this is a good one to be a spectator at, especially if you really want to see how things are handled under stress.”

“We responded quickly by adjusting home prices in many of our neighborhoods to levels that would enable buyers to qualify for FHA mortgages…” “Centex said the average price of its homes sold in the latest quarter fell 8% as it also offered more incentives to lure buyers nervous that the housing market has not yet reached bottom. Discounts and incentives totaled 11% of housing revenue, the company said.” [Ed. Note: of course the incentives don’t show up in price; just negatively in profits. Part of the reason the decline is worse than popularly reported.]

“Troubled home builder Beazer Homes USA Inc. Thursday said it will be required to restate financial results due to an independent internal investigation into its mortgage origination business and other practices.”

“Issuance of securities backed by subprime mortgages and home equity loans remains weak compared to recent history, as rising delinquencies and defaults among the loans continue to drag down the market.”

“Yeah, the idea’s probably overly-simplistic, but it seems to me that it’s better to get a 9% interest rate on a note that’s being repaid than to get a 12% rate on one that’s in foreclosure.”