What New Tulip Bulb Failed Price Discovery Near the End?

How can the securitization genie be put back into a broken bottle?

I sat down in his shade with great delight,
And his fruit was sweet to my taste.
—Song of Solomon

* * * * *

Seeing that only a modest stabilization has occurred following the collapse of the securitization market in 2007-2008, what chances are there, really, that, any new security will have power to do what those before it accomplished: namely, paper over losses accumulated throughout the financial system, and alleviate stress on immense leverage built up?

This is the question when considering present attempts to revitalize securitization.

What the Bastards Are Doing Now: HyperInflation (LPAC, 8/14/2010)
"The Fed is guaranteeing new speculative bubbles by making it
impossible for investors to earn any private return except by
highly 'derivative' speculations."

Weimar Hyperinflation and the "Flight to Trash" (LPAC, 8/15/2010)
"U.S. companies last week issued record amounts of junk bonds,
at a clip 80% higher than the same period last year, in direct
response to the Fed's announcement."

Weimar Hyperinflation: Relaunching "Securitization" (LPAC, 8/19/2010)
"The Obama Administration's declaration that it intends to
go whole-hog in supporting the 'securitization' markets in
mortgages, echoes the international British imperialist drive."

The added backing of an immeasurably weakened and ineffective Federal government is supposed to raise the credibility of these new securities? That's a laugh.

—Tom Chechatka