2007-10-15blogspot.com

"...market prices are not set by selling assets to yourself or by agreements to buy assets a back at a guaranteed price as Bear Stearns is doing.

Let's go back to the beginning. This problem was caused by loose monetary policy in conjunction with rules that allowed garbage to be kept off bank balance sheets. The proposed solution is another scheme to keep garbage off bank balance sheets. Logically the solution and the problem cannot be the same.

All indications are the Super-SIV bailout is nothing but a delay tactic that simply cannot work. Furthermore, there is another crisis waiting in the wings: commercial real estate. There is also a looming consumer led recession that is coming no matter what the Fed does. For those reasons, attempts to delay will only exacerbate the problem."


Lijit Search

Comments: Be the first to add a comment

add a comment | go to forum thread