But none of that solves the problem at the heart of the financial system: a tremendous amount of borrowed money has been invested in assets that are falling in value. The inevitable result is a credit deflation. There is no way of improving the quality of the assets.
Quelle: Credit Markets Threaten Retail Banking, Bank Runs Next?
Ergänzungen eines Harvard-Professors:
[…] The administration’s claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.
If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value.
Quelle: Commentary: Bankruptcy, not bailout, is the right answer – CNN.com
