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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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By freezing resetting of the loans they are buying time which they hope will let things work out. Time is needed to work things out, to advert a panic. The Great Depression was brought on by a lack of liquidity. The margin rates in the 20s was 90%, when the margin was called everybody had to sell all at once to keep liquid. As a consequence there were not enough buyers to support any Stock Market price level. The result was a crash that was heard for a decade, and was alleviated only by a World War.
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"Some Observer"
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