convexity

TALF Creates a New Class of Toxic CMBS Assets

The fact you cite doesn't support your thesis at all.
1. Though the move in CMBX5 BBB- from January to March in spread is substantial, the dollar price move is actually quite small (due to convexity). Further, the BBB part of the capital structure is miniscule compared with the overwhelming amount AAAs outstanding. Therefore, the overall value of all outstanding CMBS rallied since the TALF announcement.
2. The Markit data actually shows that the BBB- index was basically unchanged over the TALF announcement date. How does that show that TALF destroyed value in those tranches?
3. Much more importantly, the government didn't cause this. Poor lending standards, overpriced CRE, etc mean that the junior and mezz investors stand almost no chance of receiving their principal. I can't think of any government intervention that could halt this. That is, the value destruction in junior tranches in CMBS (as well as RMBS and other asset classes such as CLOs) is fundamentally driven and thus not curable by liquidity injection.

(It's also worth pointing out that, due to the way that CMBX yields are calculated as well as the very low liquidity in the index and the underlying individual tranches, spread changes in the CMBX may or may not actually be an accurate measure of value or change in value.)