If the losses keep mounting then the hit to the Fed will be very real. Also if the market can't price these assets how can the Fed? All I'm saying is he Fed cannot afford to prop up whole US housing market however much it would like to. I don't think the banks will be seeing great returns on their bonds. At best it'll protect them from further losses which is no bad deal for them I agree, but lets see the detail. As I say there is no magic cure the problem is still fundamentally there its just been stranfered to another part of the system.