And when the European MBS market collapses, will the Fed buy that also?

By John Galt
December 1, 2011 – 05:30 ET

A brief note in reference to this Bloomberg-Business Week article from yesterday:

European CMBS Outlook Worsens as Borrowers Fail to Repay Loans

According to the article, only 5 out of 35 European commercial mortgage backed securities were repaid at the end of October. With over €14 billion of CMBS due to rollover in 2012 and a large portion of that residing in Germany, the question has to be asked after yesterday's actions if the Fed will bail them out by purchasing foreign MBS also. If that is the case, then we can all assume that there is nothing that the Federal Reserve will not do to maintain the world's Ponzi economy.

Keep a keen eye on the behavior of the German banks and their bond performance for a clue as to just how much faith the world has in their financial system as it is viewed to be as stable as the U.S. system was in 2007-2008.