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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth
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To: geode00 who wrote (139395)9/29/2008 10:44:30 PM
From: Kevin Rose  Read Replies (2) of 173976
 
Yes, the leverage definitely magnified the fallout. The spreading of the risk meant that ALL players were taken out at once. What do they tell troops in combat - don't bunch up because one round will take you all out.

The underlying issue is still the lack of market for these beaten down assets. Once those assets are shored up, then the line of dominoes is also shored up. Once that happens, banks and other financial institutes are not as likely to hoard cash and withhold credit. The theory is that the lifeblood of credit starts to flow again.
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