They are putting off the inevitable, banks will call in loans, assets will go to auction,prices will fall and then speculators will say 'cor, bargain' and prices will stabilise or rise.
That kind of thing has happened before and it may yet happen again with increasing frequency before the sheer vacuity of the whole lot becomes apparent to all.
China and eastern europe can produce at a much lower cost base when their employees do not have expensive housing costs, what did people expect to happen ?
We live in a global economy.
We do indeed, but one of the consequences of that fact is that many banks are international and, as such internationally exposed to the vagaries of different countries' economies. China and Eastern Europe are thus far from immune to what is happening elswewhere. The AIG bale-out promise is all very well, but the US Fed does not have unlimited funds with which to continue indefinitely to make such promises whenever it receives pleas to do so - and the bale-out has to work, otherwise the egg on the Fed faces will be expensive indeed and the consequences at least as severe as would have been the case had they let it go to the wall as they did Lehman Bros.
