http://blogs.thehindu.com/delhi/?p=15830
Thus, in a recent interview Treasury Secretary Tim Geithner tried to make a distinction between the “basic inherent economic value” of troubled assets and the “artificially depressed value” that those assets command right now. In recent transactions, even AAA-rated mortgage-backed securities have sold for less than 40 cents on the dollar, but Geithner seems to think they’re worth much, much more.
And the government’s job, he declared, is to “provide the financing to help get those markets working,’’ pushing the price of toxic waste up to where it ought to be.
What’s more, officials seem to believe that getting toxic waste properly priced would cure the ills of all our major financial institutions. Earlier this week, Ben Bernanke, the Federal Reserve chairman, was asked about the problem of “zombies” — financial institutions that are effectively bankrupt but are being kept alive by government aid. “I don’t know of any large zombie institutions in the U.S. financial system,” he declared, and went on to specifically deny that AIG — AIG! — is a zombie.
I guess even Ben Bernanke knows that the inherent value of those assets are lower than what he is saying... but he just does not wish to admit it.... if he admits it would result in further collapse of the market.... US market is currently surviving on a thin line of confidence in obama.... even though anyone with sense obama is not good enough to do anything about it..... it just that people have some hope in obama, and if he admits the truth, it would result further fall
If you ask anyone economist they would recovery would only happen in 2010, but obama has to say recovery will happen this year end, otherwise he knows it will cause a loss in confidence of consumers
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