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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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From: Paul Kern9/18/2007 10:48:06 AM
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Can some one explain this to me:

The problem is the banks won't lend to each other at 5.25 per cent or to their best customers at 5.25 per cent plus X because of the crappy quality of the paper available as collateral.

So why would they lend at a lower rate given the same crappy collateral?

The answer would be to lower the fed discount rate and liberalize the types of paper the fed accepts as collateral to lend some liquidity to the credit market. No?
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