When it comes to grappling with toxic securities, the government got off to rocky start, generating lots of criticism. But it may have found its stride when it comes to commercial mortgage-backed securities. Recall that in March 2009 the Treasury, in conjunction with the Fed and the FDIC, launched the Public-Private Investment Program as part of the broad effort to repair balance sheets throughout the banking system. The salutary effects of this have slowly become clearer.

Some think the program has provided a foundation of sorts that has kept the CMBS market from drying up completely. According to Fortune, one result was "a go-ahead to many large institutional investors including hedge funds and money managers, who immediately started trading as much CMBS as they could. J.P. Morgan analyst Alan Todd calls this the 'indiscriminate price discovery' phase of the CMBS recovery. We might call it 'the market figuring it out for itself.' " 

We've indeed seen the CMBS stand its ground. We may even see a recovery if the economy would start cooperating. More good news came from Colony Capital, which won the bidding for a $1.85 billion portfolio of distressed commercial real-estate loans sold by the Federal Deposit Insurance Corp. It was the second largest of the 13 PPIP deals so far. We may well see more deals, as they feature very good terms for buyers.

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