OOPS: “The government’s official view that toxic assets are incorrectly priced due to illiquidity ‘fire sales’ is wrong, a new study by Harvard and Princeton finance professors suggests. . . . The striking conclusion is that the low prices of toxic assets actually reflect the fundamentals, rather than being driven by an illiquidity discount.” If they’re right, the whole enterprise is a colossal screwup. Are they? Beats me.
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