jcrash

Why the Fed Is Compelled to Lie to Congress

British, the problem with "If you bought a stock yesterday at 100 bucks and today is worth zero than its worth zero" and comparing that to credit is that credit is an income stream and the current market is saying the value of that credit is worth less than the stream - even though the stream has not been interrupted.

This would basically be like your car note holder coming to you and saying YOUR car is worth less now, so we need you to come up with the change in value NOW...even though you haven't missed a payment and are still using it and it is in great condition.

This is a crisis of CONFIDENCE, not of value. The value is there, but confidence is low and marking it to MARKET of low confidence makes as much money as selling your stocks only when they go down.

Obviously, the low rates is better for banks than it is consumers - they are on the direct receiving end of it. They are sucking up the delta to make money. In the end, this should make the banks immensely more valuable than they are today.