Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

This might not happen instantly, but it will happen.

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.

this theory probably has a ton of validity. the problem that i see is that these assets truly are toxic; it's like sharing a contagion. but his assessment of the duration of infection:

is the issue that i raised with becca l from montana. the problem is with the speed at which this happens. he didn't even expand on this important issue at all. this is telling to me.


again, the issue is when will this buying actually happen. buffet bought the best possible company with the smallest exposure to the toxicity. unfortunately, this is also the only company that this has happened to. the rest of the asset buyouts still must be integrated into their new parents along with the abundance of caution that goes with that...inside of a crippled economy.

i concur with his end conclusions but i don't agree with how he gets there. complete obliteration of regulatory systems is what got us so deep into this mess. we have a lot of lessons learned though to determine how to design constraints and enticements going forward.

Instead of getting rid of CRA, why not revamp it a bit to penalize banks for making loans to people who cannot afford to pay off their loan? Give banks credit for helping low and moderate income communities and individuals get credit SAFELY. Bring more safety and soundness to CRA instead of putting them somewhat at odds with one another.

I especially don't like the part about eliminating CRA. I like my job. I like having a job, thank you.

The point of the CRA is to assure that banks are serving the credit needs of all people in their assessment areas and not redlining, all within safe and sound banking practices.

It doesn't mean that you have to go out and make ridiculous mortgage loans to people with horrid credit or not enough income to afford the payment on a home.

Perhaps they should point the finger at greed of people. Greed of the mortgage brokers and the investors that bought those mortgages, the people who bought these off the hook homes instead of modest ones, greed of the banks that actually did get involved in making these risky loans and their ridiculously overpaid CEOs. But blaming CRA is misguided.

once people try to solve problems rather debate philosophy...

sounds like we are both hearing the still-beating drum of degregulatory ideology to me, bonnie. once people try to solve problems rather debate philosophy, i think that our economy will be in much better shape.

I have said it before - blaming CRA for this crises is like blaming McDonald's for obesity rates in this country.

complete obliteration of regulatory systems is what got us so deep into this mess.

sorry, that was a bit of hyperbole. let's not get caught up in semantics but i think that you know that and can privately concede the larger point that i was making.

let's not get caught up in semantics

waiting with baited breath