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Old 11-29-2007, 12:00 PM
Exsubmariner Exsubmariner is offline
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Join Date: Oct 2004
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Default Re: The differences between 1929 and Today

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the Fed has provided more short term liquidity because some normally credit worthy borrowers are having trouble finding funds to borrow short term. That's basically a credit crunch.

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Exactly. The Fed is helping with liquidity. Putting liquidity into a market does not equal a bailout.

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Kind of had a funny thought here. The bond rating agencies were apparently flat out wrong about rating the bonds derived from many CMOs. The bond rating agencies are unregulated as far as I know. Perhaps that should change.

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Yes. Conceptually, I have always had a problem with the financial ratings system. Basically, the ratings system exists to encourage people to buy financial instruments. Naturally, they are only going to say things that will make those instruments look attractive. It's kind of an incentive to fudge things. Shades of Enron.
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