Monday, September 29, 2008

The Bottom Line

Barry has another great piece today about how the treasury wants to change the rules to further manipulate - I mean stabilize - the market by suspending mark to market accounting. He also makes a simple point that is basically what I've been trying to say about perpetuating Ponzi Schemes:

"What the Fed, Treasury and SEC seems to fail to understand is that you CANNOT get a return to normalcy after a bubble -- not until prices are allowed to fall to levels that bring in aggressive buyers. That is true for stocks, houses, and even financial institutions."

Asset prices MUST come down. That means some people will lose their homes, and some people will not be able to get new mortgages or car loans. It's a fact - that's how credit works.


Unknown said...

My friend, you know why it seems you (and Barry, and me...) are the only one(s) who get this, right?

The voice of reason has no place here, no matter how many times you click your heals together and wish you were back in Oz, its just not.gonna.happen.

You'd think his Academicness, Mr. Bernanke would understand the idea of a freaking TIME SERIES, that while you can manipulate every other variable, time is still an independent variable that you've gotta deal with. Sigh...

Unknown said...

mother eff'ing blogger

Godspeed, keep fighting the good fight.


/shameless self-promotion