Friday, February 22, 2008

FELDSTEIN MISSES THE POINT

(h/t Calculated Risk)

In an op-ed in the WSJ, Martin Feldstein makes this point:
The current situation has the elements of a Catch-22: The credit flows needed for economic expansion require confidence in the values of existing financial assets, but market participants may not have such confidence while the risk of recession hangs over us.

The real issue is whether we can trust the ratings agencies which have so badly let us down.

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