[VolsNSkinsFan]

Now what the governemt "Bailout" was going to do was open a "market" where that fund/bank could take their MBS/bond and sell it to the govt fund. The govt was going to buy the bonds for half or 1/3 their orginal worth. That fund/bank now free of the ill-liquid bond could use the cash to do more lending (under tighter standards) In addition if the bank/fund wanted to use the government fund, it would have to give the govt "warrants". Warrants are an IOU for stock (hey we owe you 100 shares of XYZ corp in 2015) Now the government would hold thoses bonds till the crazyness stopped and could either sell the bonds for more then they orginally got them for to another investor (warren buffet, some overseas fund, etc) or hang onto them till they matured (30 year mortgage) and then they have these warrants which would in theory would be worth more over time, and they could sell them to you and me or whomever and keep the cash.