A key holdup to getting past this crisis is the continuing unknown of the remaining value of mortgage-based securities. In Morgan's day, price discovery resulted when he went around the room seeking details of balance sheets... Getting our arms around the scope of the bad debt would define the capital needs for banks, and there would be prices set that potential private-sector buyers of the debt could consider.Wall Street doesn't need extra cash - they need a proper valuation of their own assets.
Tuesday, September 30, 2008
I'm not the only one who thinks the 2008 Credit Crisis is comparable to the Panic of 1907. Gordon Crovitz writes in the Journal: