This Bloomberg piece suggests that the various financial instruments related to mortgage backed securities have become untethered from reality. Roughly it's another volley in the liquidity crisis versus insolvency crisis debate. Is big shitpile really as shitty as the ABX indices suggest? It's nice to blather on about how they've become untethered from "asset fundamentals," but I'm missing the argument about why this is. Sufficient speculative pressure can drive prices, but I haven't quite figured out how this makes sense here.
