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IPFS News Link • Economy - Economics USA

'Shock and Awe' Needed to Combat Recession: El-Erian

"You need a shock-and-awe approach to the banking balance sheets," said El-Erian, whose firm operates the world's largest bond fund. "You cannot do this through multiple rounds because people lose confidence."

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Comment by Sharon Jarvis
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I think this guy is completely wrong. Banks ARE lending. And what he proposes does not address the major problems causing the meltdown. The continuing real estate foreclosures and the loss of jobs stop people from spending money. The other is the lying financial system which no one around the world trusts. Putting the bad assets elsewhere--or getting the taxpayers to swallow the cost--does not address the basic cause: all these investment companies and bond rating companies that colluded to defraud buyers. The proposed stimulus package won't work either because it does not address these three problems.