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Subject:  liquidity crisis Date:  8/25/2007  9:11 PM
Author:  huddaman Number:  21396 of 36405

in layman's terms, and perhaps a bit technical terms, can someone explain what's the deal with liquidity crunch? I understand the root cause is subprime mortgages and the fact that stream of payments from mortgages is in jeopardy especially since the ARM's resetting.

But why does it matter so much? I mean it does to some extent, but how does it affect country wides, or washington mutuals of the world? And what brought down Bear stern hedge funds or why did Goldman sachs have to get a haircut? I didn't even know large investment banks can have a haircut too. :)
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