Think Julio has it right-- at top and bottom, it's all about class struggle and how much the ruling class can force the workers to take.
Crisis, collapse, liquidation is essential; liquidity becomes illiquidity when the availability of funds is not refracted through the expanded reproduction. The great liquidity of the 2003-2005 era being the case in point--where housing "equity" was converted into expanded debt while manufacturing profitibality was restored through the restriction of capital spending. Liquidity is more than availability of funds; its demand for the conversion of funds into vehicles for expanding profit. With housing being "financed" with only 5% (and less) front payment, we now see the great CDO margin call, and I think (probably in hindsight) we will be able to match that with a real softening of profits in manufacturing (and the expansion in capital spending). ----- Original Message ----- From: "Jim Devine" <[EMAIL PROTECTED]> To: <[email protected]> Sent: Saturday, August 11, 2007 11:13 AM Subject: Re: [PEN-L] Phil Izo (WSJ) interviews David Resler (Nomura) and David Wessel (WSJ) > Julio Huato wrote: > > http://link.brightcove.com/services/player/bcpid452319854?bctid=1137970231 > > > > Phil Izo (WSJ reporter): Do you think it [the central banks' injection > > of liquidity] is gonna be enough? > > > > DW (WSJ): I have no idea whether it's gonna be enough. I suspect they > > don't know whether it's gonna be enough. > > if it isn't enough, they'll inject more, no? > > the key question for me is whether or not there are more and/or bigger > problems trickling up from the collapse of the housing bubble that > will necessitate more and more and more intervention by the CBs. Then > the interventions threaten us with more inflation. > > as I've said, the Fed faces a dilemma. Lower rates, a lower dollar, > more inflation vs. higher rates and greater collapse. > > > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. >
