People who have money are doing ok the past month or so:
Posted on 02/20/2009 2:15:43 AM PST by TigerLikesRooster
Why the Failure to Understand the Global Financial System?
Some readers may take issue with the headline, but bear me out.
/snip
Contrast the 1987 panic with our credit meltdown. The 1987 crash was a single country event, in transparent markets (equities and equity futures). This crisis revolves around multiple over the counter markets (asset backed securities, including securitized auto, student, residential and commercial real estate loans, CDOs, CLOs, CDS) that were originated and sold around the world. The authorities have an weak to non-existent picture of trading volumes and prices. In addition. they also do not have a good feel for the terms of the instruments themselves (these were privately negotiated agreements; unlike registered securities, the offering documents are not a matter of public record). And the lack of an understanding of the range and mix of types of deals impedes developing sound policy.
/snip
Even with a full court press starting in March 2008, it probably would have taken 6 months to get a better picture. It would be impossible to get a full picture in that time, but if one set investigation priorities well, one could have a great deal of insight on the key issues (most things in life are 80/20, meaning 80% of the value comes from the top 20%; there is no reason why an effort like this should be any different). And before you say regulators were overtaxed and lacked sufficient personnel, the Brady Commission was headed on a day-to-day basis by a Harvard Business School finance professor and staffed largely by junior-mid career people from the private sector with relevant analytical and industry knowledge (they were seconded from their firms; it was considered an honor and a career boost to participate).
(Excerpt) Read more at nakedcapitalism.com ...
Ping!
Today is not going to be pretty on Wall Street.
Well, at least people that have cash, dollars, can trust that it will be valuable tomorrow and for years to come. Right?
Hello? Hello?
The failure to understand the financial system is mostly due to a huge set of regulations, laws and governmental mandates that make the system only understandable by people who have studied it for their entire lives. If the government didn’t meddle, it would be a black and white system that even a third grader could understand. Heaping on more government decrees and strings will only harm everyone.
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We’re in the midst of a storm. People have to be clever. You don’t get to follow the kind of rules that can be printed on a bumper sticker and be all right. The people that believe in slogans are gonna be the first to go under.
There is no mystery here: Talking heads and business writers are simply vomiting back talking points dictated by the White House. Garbage in, garbage out.
$ 6.9 Trillion Was Lost By Investors in 2008 !
That does not include what was lost in 2005, 2006 and 2007. It also does not include losses due to hyper-inflated real estate and reckless borrowing thereon. Also does not include all the stupid credit card over limit charges and excessive fees deducted by banks.
I estimate total losses before 2009 easily at $ 9 Trillion. Underestimated. What's not to understand ______ ?
Our society is controlled by greedy crooks, blackmailers and thieves.
How many mega-Madoffs and super-Stanfords are out there, ready to blow up?
People who have money are doing ok the past month or so:
The trouble is that investment banks have shareholders who get hurt when those banks shoot craps with other people's money, and obviously those banks should not have absolute freedom to be irresponsible.
Yes, I blame the government for pressuring lenders to make unsound mortgage loans based on race, etc., and both parties are guilty. But how much did the Community Reinvestment Act contribute to the mortgage mess? There seem to be significant delenquencies among higher and lower icome mortgages too.
Rates by Relative Income Zip Code1 [footnote 1. Source LoanPerformance. End footnote.]
Delinquency Rate as of August, 20082 [Footnote 2. For mortgages originated between January, 2006 and April, 2008. End footnote.]
Lower-Income Zip Code Subprime: 25.0. Alt-A: 16.1. Total: 21.5.
Middle-Income Zip Code Subprime: 21.3. Alt-A: 12.9. Total: 17.7.
Higher-Income Zip Code Subprime: 19.5. Alt-A: 10.9. Total: 14.5.
Here is a claim by FED governor Duke that the Community Reinvestment Act did not contribute significantly to the mortgage crisis:
Why do lenders have to report race, gender, census tract, amount of loan and income, but not credit score data?
Because banking regulations are drawn up by liberals. Liberals who use guilt and fear of being called names like racist or unfair to women etc...
And the average banker know the MSM is the "enforcer" for those same liberals who make the regulations - the big boys WILL be called in to expose the banker publicly - "60 Minutes" etc. is calling.... )
And reporting credit scores would show banks were trying to be fair all along and were pressured by liberals to make awful loans.
People are afraid of being called racist, unfair to women or the poor - and that charge can be made as long as FICO scores ( a true "level playing field" number ) are kept OUT of the mix.
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