Monday, January 12, 2009

Uncertainty Prolongs Recessions

An auction for 56 foreclosed properties in Utah fell through when the owners rejected the bids. Auctioneer Eric Nelson says the banks and private lenders who owned the properties decided to wait and see if they might get a better offer from the federal government.
--Reason Magazine, February, 2009, page 9

I don't doubt that this same type of uncertainty is keeping banks holding onto "toxic assets", freezing propensity to trade, and prolonging the recession.

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