On Wed, Mar 11, 2009 at 7:40 AM, Gruss  wrote:

>
> > RoMunn wrote:
> > The whole Merrill/Bear/Lehman/AIG string of events totally mystifies me.
> > really don't know, and I wonder why we are continuing to put so much
> money
> > into AIG. Do we have a hope of seeing that money again?
> >
>
> Dude.  Swaps.  I've told you a zillion times.  It's not in any way
> complicated:


Sounds complicated to me, but I'm not a finance guy, either.


>
> Until the swaps problem is fixed this could happen at any moment.
>
> Which is why I've been telling you there's no sub-prime crisis.
> That's a made up fable.
>

I agree that swaps are the larger issue that needs to be solved, but the
housing crisis was the catalyst that triggered the vulnerability in the
swaps system. The swaps thing needs to be solved because it is a systemic
vulnerability. The housing crisis will eventually solve itself as prices get
low enough for people to buy, but that may leave millions of people out of
their homes, which counts as a a crisis in my book.


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