So-called toxic assets may be losing their poison, according to one gauge of investor confidence in mortgage-backed securities. But that doesn't mean banks will be marking up or selling their most troubled assets anytime soon, industry watchers say.

A rebound of a somewhat obscure index that tracks derivatives tied to subprime home loans is signaling that hedge funds, private-equity firms and other investors may be seeing more value in the intricate financial products at the heart of the credit crisis.

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