Aw hell, the 'feeling' is tragic, downright devastating, which is why I avoid feeling it. Then again, when you think about this nonsense it's hilarious!
--which also probably explains why doom'n'glomers are a bit slow with the thinking part...
Posted on 02/02/2009 12:41:18 AM PST by Tempest
The basic story line so far is that we are all to blame, including homeowners who bit off more than they could chew, lenders who wrote absurd adjustable-rate mortgages, and greedy investment bankers.
Credit derivatives also figure heavily in the plot. Apologists say that these became so complicated that even Wall Street couldn't understand them and that they created "an unacceptable level of risk." Then these blowhards tell us that the bailout will pump hundreds of billions of dollars into the credit arteries and save the patient, which is the world's financial system. It will take time—maybe a year or so—but if everyone hangs in there, we'll be all right. No structural damage has been done, and all's well that ends well.
Sorry, but that's drivel. In fact, what we are living through is the worst financial scandal in history. It dwarfs 1929, Ponzi's scheme, Teapot Dome, the South Sea Bubble, tulip bulbs, you name it. Bernie Madoff? He's peanuts.
(Excerpt) Read more at villagevoice.com ...
Here you go...must have come from another poster.
Nov. 22 (Bloomberg) — The market for derivatives grew at the fastest pace in at least nine years to $516 trillion in the first half of 2007, the Bank for International Settlements said.
Credit-default swaps, contracts designed to protect investors against default and used to speculate on credit quality, led the increase, expanding 49 percent to cover a notional $43 trillion of debt in the six months ended June 30, the BIS said in a report published late yesterday.
I am hoping that some of the laws regarding Enron may help or perhaps we can get them on their risky investments...some may have been fraudulent...maybe the RICO...I’m open to suggestions.
I don’t believe it...we bailed out AIG which is not even an American company.
We keep losing jobs...who knows. However, I don’t care what unemployment is in Kenya...the old ‘we are better than some argument does not impress me’.
We will go into a depression this time around. You need to stick your head outside of your cubicle and look around. There are layoffs and business bankruptcy's lined up like dominos for the first quarter of ‘09 as far as the eye can see.
Expect unemployment to rise over 20% before it is all said and done.
How do we know what they lost or gained before the economy crashed? I bet more than a few got out...in time. We need to have an criminal investigation into all of this.
Cheery news...I want my Mommy.
So you don’t think deregulation and lack of over-sight allowed Wall street crooks to fabricate boiler rooms?
Yes, the nominal value of these contracts is very large. The idea that $516 trillion actually changed hands is ridiculous.
Here's the difference. Say you bet $10 on the Super Bowl. The Steelers are worth about $800 million, the Cardinals about $900 million. The nominal value of your bet was $1.7 billion, but your maximum gain or loss was $10.
Glad I could help.
It's an OK article on our economic crisis, But GM & Chrysler didn't come to need bailouts due to CDO derivatives and sub-prime mortgages!
What we've got are systemic problems such as:
1. Global Manufacturing overcapacity
2. A worldwide glut of office space, homes/condos, and retail (too many shopping malls)
3. International trade imbalances and currency manipulations (e.g. China)
4. A complete liquidity drought (i.e. banks aren't lending)
5. Massive destruction of credit (consider the fall of margin credit for buying stocks).
Also, keep in mind that derivatives are economic non events. They are zero sum. Sure, one party could lose big on a derivatives bet, but that means that the counter-party won big. Same money in the economy, though.
For our economy, the money may have moved from the loser to the winner, but the wealth wasn't destroyed.
This is a very important point. Derivatives moved wealth; they didn't destroy it.
Yet the global economy has seen 40% of all wealth destroyed in the past 5 Quarters. Look there for the cause of the problem!
And keep in mind that world economies are going to be working through the overcapacity and oversupply issues mentioned above, along with the credit crunch.
Enron booked phantom profits. Trading a CDS is not booking a phantom profit.
I fail to see the ‘error’...as I stated they knew exactly what...no quantity but whatever.
Aw hell, the 'feeling' is tragic, downright devastating, which is why I avoid feeling it. Then again, when you think about this nonsense it's hilarious!
--which also probably explains why doom'n'glomers are a bit slow with the thinking part...
You said these guys knew exactly what they were doing. Their huge losses are proof they did not.
Warren Buffet the oracle from Omaha says derivatives are H bombs...hardly zero sum.
BOOKMARK
Did the ones who started this really lose or did they take their money and run before it began? Also, this scheme had potential to crash the economy and did crash the economy...they made plenty of money before this happened. I’m betting that many did in fact get out in time...leaving us to deal with the crap they created. Those who lost their money merely stayed in too long...it doesn’t change the fact they caused it.
You all are a little slow at observing what’s going on...ideology blinds so many.
The author doesn't yet grasp that derivatives are zero sum...that $600 Trillion in derivatives simply moved the self-same $1 Trillion back and forth between related parties 600+ times.
Obviously there's not $600 Trillion to "Take Back!"
Identifying $600 Trillion in total trades/contracts is not the same as identifying $600 Trillion in unique wealth.
Did Bear Stearns lose money? Lehman? AIG? Merrill?
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