Question to you or others, and I hope I can characterize this sensically: I get the sense that the financial markets still don’t fully believe how bad the housing market is going to get-that’s why they think there is a liquidity crisis.
That said, there is enough fear out there of the unknown that asset prices are pretty well reflecting future reality even though this reality is worse than the current financial forecasts.
That’s my stab at an explanation of why everyone is perceiving a liquidity crisis, when the reality is as you say: we have a shitty asset crisis (we just haven’t come to grips yet with how shitty the assets really are).
