Tuesday, August 31, 2010

Morning and Stuff

Not an economist, but I think Ruth has it about right. The financial system is like a house of cards that is teetering on the brink of collapse. Sooner or later all the assets held by the banks will have to be valued at market rates instead of the inflated values currently assigned to them. I suppose our betters are hoping that either the housing market will re-inflate or that they can spread the losses out over several years for a soft landing. Either way, it's not very comfortable knowing that we're so close to having the whole house collapse.