Tuesday, September 23, 2008

Understanding the Financial Crisis - VIII

The Republican Senator from Utah (not Orrin Hatch) on the Banking Committee said...

Our economy runs on credit
Credit is made available based on confidence
Confidence is maintained and risk taken when 1) collateral is worth it, and 2) cash flow is sufficient.

Right now the confidence is shaken and that's what they're trying to figure out - how to get confidence back.

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