[tabs]

Simply put the US Government is going to be buying up all those Sub Prime Bonds for PENNYS on the $$$$$. Say $0.25 on the dollar the Financial institutions paid for them. Mind you most of those mortgage holders are STILL paying their mortgages (P+ I). That means there still is cash coming in on those Sub Prime Bonds, they have value. In time those mortgages will be paid off or refied. Thus the government is going to MAKE A PROFIT on those sub Prime bonds.

The problem has been that no one knows the rate of default on anyone of those Sub Prime bonds. No one knows what each one of them is really worth? I t could be $0.10 or $0.875 or even $1.00 on the $$$. Thus if no one knows what they are really worth, no one can price them and if ya can't price them well ya can't sell them. Thus they are essentially worthless from a sales point of view. That is why all these institution s sank, because as they wrote down the bonds they had to come up with more cash to cover. Plus the fact that they borrowed one on top of the other up to 30X on a single bond so that they could have more of them.