On Oct 9, 2008, at 2:26 PM, C. G. Estabrook wrote:
> The crisis (literally, a separation) seems to consist of the refusal
> of those who own or control money to lend it (it's useless to point
> out that "loan" is not a verb) unless they're paid more.
No. They're not demanding higher interest rates. Interest rates on interbank loans - which are largely fictitious, since so little lending is going on - are quite high. It's that no one wants to lend the money *at any price*. They're too worried about getting the principal back.
> They surely have the money: e.g., the WSJ pointed out the other day
> that "Exxon has $39 billion in cash and has been buying back shares
> at an $8 billion-a-quarter clip; the value of the stock it has
> repurchased is about $218 billion, a shade less than the current
> value of General Electric Co."
Last I checked, Exxon is not a bank. So the state of their balance sheet isn't really relevant to the crisis.
Doug