Gari finds a gem in an FSA presentation:
Of its roughly $19 billion investment portfolio, $13.5 billion is parked in residential mortgage-backed securities, and of those RMBS holdings, almost $8 billion is first lien subprime.
But it does seem that whereas the problems with MBIA, Ambac, and the rest were that they insured some very dodgy credits, that wasn’t the case with FSA. FSA just behaved like a jejune Norwegian municipality, and bought billions of dollars’ worth of dodgy assets. Oops.