Comments on: A crisis of solvency?

By: brian mcnamee

brian mcnamee — Thu, 30 Oct 2008 01:21:10 +0000

With now sensible lending standards housing prices will slip to meet the current qualifications to obtain a loan. 20% down and 35% of docmented income. How many buyers have a down payment socked away? this slide will go and reach everywhere. The funny thing is a rush to treasries, its like the chickens hiding out in the wolfs house. you want to trust your money to an institution that is 20 trillion in debt whos liabilities are rising while its income is shrinking? Will not the big picture be so much liquidity that we are all billionaire but to bad a roll of toliet paper will cost 2 billion.

By: Kierei Lee

Kierei Lee — Wed, 29 Oct 2008 17:19:22 +0000

I agree with both Jeremy,and JC.

By: Toney

Toney — Sat, 25 Oct 2008 17:37:28 +0000

I read this morning (Oct. 25) that some foresee an additional 20 percent decline in home values before the market eventually stabilizes. This will even further erode lending institutions’ capital. Mr. Kemp’s argument, I believe, and that of Sheila Blair, is to stop propping up insolvent banks (Citi for example, who has no intention of lending the $25-billion they were given) and address Main Street’s side of the equation.

By: Tom Burton

Tom Burton — Sat, 25 Oct 2008 06:49:43 +0000

TARP was sold as a way to assure banks’ solvency in order to restore liquidity, encourage lending, and loosen the “seizure” of credit. The fear factor in the sales pitch was that this seizure would lead to rampant insolvency everywhere, not just in the financial sector. As the article points out, deleveraging, not confined to banks, still threatens rampant insolvency everywhere. We’ll spend our way out of this mess with trillions of borrowed dollars. The good news from the Great Depression is that even war spending can work. We ought to be able to think of a more efficient way to spend money today. The bad news is that, in the midst of this spending spree, the US dollar will likely cease to be the world’s primary reserve currency.

By: J C

J C — Fri, 24 Oct 2008 21:37:03 +0000

We should plan to restructure our withered manufacturing base rather than depending on borrowed spending by the consumer.

By: Jeremy

Jeremy — Fri, 24 Oct 2008 20:06:15 +0000

Tarp does address solvency. Capital injections into banks increase capital ratios.