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Many banks bought mortgage-backed securities during the zero-rate days to “juice income,” but now, on a mark-to-market basis those MBS are trading for a fraction of purchase prices, creating losses of 50 to 60 percent of capital. “Regulators are not pleased.”
What has cloaked the recession is government largesse in the form of the added $600 to weekly unemployment claims. While the juice from that lemon ran dry August 1st, it will be replaced by a $300 or $400 weekly bump once Treasury Secretary Mnunchin gets around to cutting the checks.
