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If someone wants to withdraw money from a fund, you first have to know how much the fund is worth. Since the fund managers don't know how much the funds are worth, they're not letting people withdraw money until they do know how much the funds are worth.

That's what they are admitting to, right now, anyway. But according to their logic that things are worth what the markets can bear, they are actually, in a very real sense, worthless.

If you insist that they are not worthless, you have to drop the pretence that markets can measure everything all the time. This is a fundamental point to make.

That banks and companies can be in long term commercial relationships and not just mercenaries focused on immediate profit. That trust has value, i.e. that relationships, social links, and, gasp, community have value.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Aug 9th, 2007 at 02:38:59 PM EST
[ Parent ]
The irony is that these bank sponsored papers are indeed worthless at market value (since there is no buyer) and that is the case because everyone is too leveraged by the very same banks and so no one has money left to be a buyer...

All of course caused by ECB total lack of willingness to act as a real bank regulator (since ECB now has a monopoly on this).

Politically the ECB actions are nothing short of incredible:

  • ECB criticize strongly workers union for asking for raises and going to strike, totally outside of ECB mandate
  • ECB criticize states for their work regulations, totally outside of ECB mandate
  • ECB says because of the two above it is forced to raise rate and create unemployment and unrest, hell to evil workers and policiticans!
  • ECB just creates 100 billions in liquidity to save rich people and irresponsible banks shareholder value, ECB fully responsible for the mess because it did not act
  • ECB, now that rich people and shareholders are involved  might not raise rates after all !!!!

No MSM will report those simple facts put together of course...
by Laurent GUERBY on Thu Aug 9th, 2007 at 03:06:27 PM EST
[ Parent ]
Now you know who the ECB really work for.

The US Fed is not different.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Thu Aug 9th, 2007 at 04:13:02 PM EST
[ Parent ]

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