Adding to what Jay is saying: The cridet crisis is really a valuation crisis. No one knows what debt is worth any more. And because no one knows what it's worth, no one is willing to buy it. Businesses are unable to sell debt to raise capital. This doesn't apply just to toxic securities look at what happened to the commercial paper (short term loans) market last week. Interest rates on many terms (ex: 7 day, 30 day) just about doubled and volume plummeted. These are not financial institutions trying to raise money. We will not escape a depression if businesses cannot sell debt because no one can agree on what it's worth. What the government is proposing to do is to buy this debt today in the absence of any clear valuation, and sell it later when the market knows how to value it. I completely agree that this is a vote of no confidence in today's market conditions. Rate this comment: 0 0

by Jazz 06:49:06 PM 2012.11.01