> Yeah well I would agree with all of that - the crucial point being
> that these instruments' dramatic loss of liquidity was more of a
> problem for the banks than the fall in the future revenue streams
> associated with them.
Exactly. Sorry if I was making a redundant point.
> I fully agree that the monetisation and sudden
> demonetisation of mortgages is the most interesting thing of the whole
> episode.
>
It is interesting. I wonder if the appearance of this new form of circulating money that's only used to buy financial assets, never consumer goods, is part of the reason why the past 25 years has seen so much asset-price inflation and so little consumer-price inflation. I remember articles in the Economist puzzling over this in the 90's.
SA