Fed's auction of AIG bonds triggers subprime activity

04/6/2011 | Wall Street Journal, The

The Federal Reserve Bank of New York today will sell $1.5 billion worth of mortgage-backed bonds it bought from American International Group. The Fed's action has sparked a flurry of activity in the subprime-mortgage market as banks, hedge funds and other bond holders closely watch the sale as an indicator of the value of their own holdings. Some companies are circulating "bid lists" of residential mortgage-backed securities.

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