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On Fri, 10 Oct 2008 12:22:12 -0400, Dana Dorsett <[log in to unmask]> 
wrote:

>Mike Bernstein [[log in to unmask]] writes:
>But the hard crystalized rot that keeps the music muted is still the
>ocean of bad real-estate paper, non?  Under the best of circumstances
>thawing a freeze this tight would be slow, but with the fundamental
>problem still in place it's nearly (or actually) impossible.

DD - 

I think it's gone beyond that now.  Housing WAS at the root, but the genie is 
now out of the bottle.  The entire financial system was over-leveraged, with 
asset/credit bubbles in many sectors of the global economy, and now that is 
unwinding.  Consumer credit has been too easy.  Governments haven't saved 
enough.  There is a whole host of problems that have now taken on a life of 
their own.  Just stabilizing housing won't end the troubles, though can 
certainly help to mitigate the damage.  There is a fundamantal confidence 
issue right now, and if no one thinks their counter parties are going to pay 
them back, no one is going to be lending money.  

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