Richard Green is a professor in the Sol Price School of Public Policy and the Marshall School of Business at the University of Southern California. This blog will feature commentary on the current state of housing, commercial real estate, mortgage finance, and urban development around the world. It may also at times have ruminations about graduate business education.
Tuesday, February 23, 2010
If this is happening, the Administration is Pretty Clever
I heard a real estate investor this morning claim that as banks are making profits because of the spreads over their cost of money, regulators are forcing them to liquidate bad assets and realize the losses. If this is really going on, somebody really smart is behind the idea.
Can you please elaborate on this for those of us who aren't economists? How is this really smart?
ReplyDeleteBecause it's the opposite of what happened in Japan. Loss realisation means the deleveraging actually happens.
ReplyDelete