Is Wall Street just remixing soured mortgage securities for profit?

Updated

Wall Street firms have found a new way to make money on their badly packaged real-estate mortgages: "re-remics" -- short for "resecuritization of real estate mortgage investment conduits." Sounds to me more like revaluing bad investments to make a firm's bottom line look better and possibly sell off toxic assets at a higher price.

Basically, re-remics unwind the complicated CDOs that were mixed with prime and subprime mortgages to get higher ratings for the mortgages that are still performing well. By doing this, the bank or financial institution can then show it holds higher-rated securities that require less capital, thus freeing up cash for other financial activities.

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