[adios]

Hi Jimbo,

I'd take the quick profit and here's why. My understanding is that TMA does their borrowing to buy MBS via repos. When the value of the bonds falls to a low enough level TMA can get margin calls via the repo agreements that they entered into. I believe this is precisely what's happening now. Lower grade MBS is shall we say is quite illiquid at this point and thus the bonds TMA owns are nose diving. Someone pointed out to me how the repo dealers can really put the chingas to TMA and make a quick buck off of forcing TMA to liquidate. Also my understanding is that the TMA portfolio is 80+% IO loans thus they don't pay down and are risky if and when housing prices hit the skids. PM me for more info on this one if you'd like.