Monday, November 26, 2007

State capitalism & central banks going down

This isn't mortgage-backed junk that's being sold, but highly liquid bonds that are usually easy to cash in. The ECBC's action is a sign of pure desperation and indicates that credit paralysis has infected the entire euro banking system.
That's bad. The mechanism for converting covered bonds into cash has broken down.
See the numerous state sponsored solutions
listed, all to become giant failures.