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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: pogohere who wrote (26883)	12/26/2007 4:30:10 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 217739

The problem is there is no "liquidity crisis". There is only a "solvency crisis". If someone is offering $100 mortgage or CDO bonds as collateral, which are now worth only $30, no amount of liquidity would make me or any other independent party want to lend them a full $100 on each of their bonds. To the extent that the Fed and ECB are willing to taking these bonds as collateral at face value, well this lending program is short by about $3 trillion so far to maintain the fiction that there are no major losses to be taken. If they did so, there would be hyperinflation. The losses will be recognized, its only a matter of time. Everything is no business as usual. .