John Hussman doesn't buy Sarkozy's Friday claim that easier ECB lending will allow banks to...

|By:, SA News Editor

John Hussman doesn't buy Sarkozy's Friday claim that easier ECB lending will allow banks to funnel funds into sovereign paper. He calls such a move a disaster that would increase leverage ratios even more, and cause bank funding to dry up as all would now be junior to the ECB. "This is a solvency issue - a shortfall between money owed and the resources to credibly repay it. There is no ... trick to get around it."