Firms might rush to list their shares and issue new equity, causing the overall stockmarket to fall in the face of the extra supply of shares.Taxing interest would hurt bits of Main Street, too.
"Adding equity causes all sorts of stresses and strains," writes Sorrell in an e-mail.
CBOE Volatility Index (VIX): Just when you thought it couldn't get any worse, a wave of selling pressure hit global equities caused by further reports of economic weakness and the deepest contraction in New York area manufacturing activity on record.
The revision, it said, was mainly the result of write-down of equity securities caused by a drop in stock prices.
Even so, worries about bad loans and a slump in the value of its equity holdings caused Standard & Poor's to cut the German bank's credit rating (as well as those of HypoVereinsbank and Dresdner).
His big speech on QE, back in January 2009, did not mention share prices at all.If it is vital to maintain stockmarket confidence, then equity jitters whether caused by Japanese earthquakes, European fiscal problems or something else are a reason to keep QE going.
Not last Friday, when a general exodus of U.S. equity investors caused the MSCI EAFE Index and the iShares Japan Index to be the third and fourth largest value losers.
The gut reaction for most investors was to just say yes and pony up, because you wanted those returns, particularly in the aftermath of the punishing equity losses caused by the bursting of the dot-com bubble.
Lending decisions will be improved with more equity funding; it is too much debt, and not too much equity, that causes credit crunches.
"Abusive loans that strip borrowers' equity or cause them to lose their homes should not be tolerated," Mr. Kroszner said.
