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http://www.huffingtonpost.com/ian-we...m_b_71285.html
In the world of cartoon physics, the law of gravity didn't take effect until you realized you'd been breaking it. Once you did, whoosh!
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A large part, but not the only part, of what's been keeping the economy up there, instead of down in a ditch, is the same thing that keeps Wile up. As long as no one believes the US economy is massively overextended, that collaterlized debt instruments were properly valued, that derivatives based profits and valuations weren't illusionary, they were willing to keep lending the US and Wall Street money and buying their pieces of paper.
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A large part, but not the only part, of what's been keeping the economy up there, instead of down in a ditch, is the same thing that keeps Wile up. As long as no one believes the US economy is massively overextended, that collaterlized debt instruments were properly valued, that derivatives based profits and valuations weren't illusionary, they were willing to keep lending the US and Wall Street money and buying their pieces of paper.
...snip...
There's a mystery on Wall Street. Merrill Lynch last week wrote off $8.4 billion in its subprime mortgage business, a figure revised up from $4.9 billion, yet Goldman Sachs reported an excellent quarter and didn't feel the need for any write-offs. The real secret of the difference is likely to be in the details of their accounting, and in particular in the murky world, shortly to be revealed, of their "Level 3" asset portfolios....
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