Stiglitz Article

http://www.nytimes.com/2009/04/01/opinion/01stiglitz.html?adxnnl=1&adxnnlx=1238594643-f9+hXpteoLkYq3OCVdVn4g

good article... i have a bunch of stiglitz books on my reading list. I just think everyone is stubbornly hoping that the assets are undervalued right now. Here is where Stiglitz's (more realistic) assumption differs from that perspective: "The real issue is that the banks made bad loans in a bubble and were highly leveraged. They have lost their capital, and this capital has to be replaced." What the administration (and lots of people) is stubbornly hoping is that banks have only "lost their capital" insofar as no one wants to buy the assets right now due to a lack of confidence (hence the whole issue with mark to market), but fundamentally the assets still have value. Stiglitz is saying get real, most of the assets are worthless (thanks, housing bubble), hence the collapse. Maybe the admin thinks that if it can prop up the housing market, then the assets will be worth something.