John Lounsbury

Further Evidence of TARP Error

Jeff, I am surprised that there are no comments on this excellent Op Ed piece. The lack of a market is a significant part of the problem. It still remains uncertain just where this will all shake out if an adequate exchange is established because the value of the underlying assets (houses) is a moving target. Unfortunately, the direct of movement for house prices still appears to be downward. Under these circumstances, the discovery of a transparent market would be decreasing CDO and CMO prices and the deleveraging process becomes ever more difficult.

I will agree with your conclusion that the odds of finding a bottom to the spiral improve with a proper market place for the collateralized securities. I fear, however, that bottom might still not be near, either in security valuations or in time.