Toxic Assets, Toxic After All
That's according to a new study from Joshua D. Coval, a professor of Business Administration at Harvard, and Princeton economist Jakub W. Jurek.
Coval and Jurek write that the prices of toxic assets reflect fundamentals and that the low prices are not--as Geithner and Treasury argue--the result of "fire sales."
"Policies that attempt to prevent a widespread mark-down in the value of credit-sensitive assets," Coval and Jurek write, "are likely to only delay – and perhaps even worsen – the day of reckoning."
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