Who asks: why is going back to the 2007 securitization model for the banks better than returning to the traditional bank lending model?
Answer: It isn’t better, it’s worse. But the banks are largely insolvent now and they still haven’t come clean on their balance sheets. So even the traditional model won’t save them from themselves. Goingbackwardville is all the Fed has to offer.
Gorilla answers: “Spell TALF and TARP backwards, and you’ll understand banking policy in Movingforwardville!”
Tags: banks, goingbackwardville, movingforwardville, Paul Krugman