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 ...
They don’t remove risk, they move it around.
He took profits...to bad he wasn’t smarter he could have got the 1 billion too...Ah well he’s in his 70’s so maybe not as quick as he once was.
True...they remove it from their bottom line to someone elses bottom line...the economy and taxpayer as it were...so you are correct.
I guess he didn’t know exactly what he was doing.....
Derivatives were invented to remove risk FROM THE INVESTOR AND/OR INVESTMENT as were hedge funds...you know this if you want to be intellectually honest.
It all boils down to individual opinion. Nobody really knows were it went or what really happened.
All we know is this is the way it is and the very few of us who are debt free will come out of it OK.
Personally, I have gone back to the ancient “Pay-As-You-Go” lifestyle and will never again, look back. Not to mention, I have moved most of my savings into commodities and bonds and did so in Sept. of last year. (I saw this coming)
No...he knew the jig was up...he has plenty of ill gotten gains...no worries.
Bear Stearns’s stock may be hitting new 52-week lows, but the firm’s chairman just put the finishing touches on a high-flying real-estate deal.
Cayne was fully invested in Bear Stearns ..... he rode the stock down to the bottom. His wikipedia entry has more details
So at least he lost his shirt unlike many others to created the derivatives swill but had the IQ to not invest in their own company
Congratulations...I didn’t see it coming so I lost most of my life savings.
Good point...one wonders how much he was involved in the day to day operations...didn’t really know what was about to happen.
If I buy a CDS as a stand alone security, I have just added risk to my investments.
you know this if you want to be intellectually honest.
You're funny. You don't understand the market but you make me laugh.
If this guy is correct they can’t print money fast enough to pay off the high flying gamblers, there will be a cloth/paper shortage first.
Say what you will...AIG and others provided insurance for bad investments...they removed the risk for investors...and transferred the risk to the economy basically. Traders freed up from the risk thing...made increasingly stupid and dangerous investments...Buffet is a smart guy...he called derivatives H bombs.
This is why, I don’t think money will be worth much...What happens in an FDIC insured bank when it goes under? The government guarantees the money...by printing more money...how much will it be worth in the end?
I seriously understand how you must feel, especially why you are so turned off by Wall Street.
I lost some money myself because some of it was locked into the market. I guess the best advice I could give anyone right now, is get rid of all debt. I have been fortunate since I did that nearly 20 years ago.
What ever your case, I understand where you are coming from and wish you the very best of good fortune. (If that helps) And hopefully some miracle will happen and this economy will come back strong under Conservative leadership again.
Thanks...I have little debt outside of my mortgage...as I have lost my job...April 1st out the door, I will need all the luck I can get. As for my losses...hey we all know losses are possible in investing. If I had made bad investments, it would be one thing...but the system was rigged. I am furious with the street and our government as well...won’t do me much good personally, but I want heads to roll.
The writer makes a convincing argument; somewhere around the fifth page he lets us in on an interesting tidbit:
“In 2000, AIG asked the New York State Insurance Department to decide if it wanted to regulate them, but the department’s superintendent, Neil Levin, said no. The question was not posed by AIGFP, but by the company’s main office through its general counsel, a reminder that not long ago, AIG was a blue chip with a triple-A rating that touted its integrity.
We can’t know why Levin rejected the chance to regulate the tricky trade. He died in the restaurant at the top of the World Trade Center on the morning of 9/11.”
Working backwards from this article, he might want to turn this into a blockbuster fictional drama using the above quote as the opening paragraph.
Just think, with a bit of creative cloak and dagger conspiracy type embellishments this could be made to look like all this was planned that fateful day the planes lined up on target.
All this time, we’ve been blowing holes in the sand and decimating whole cities, the terrorists have been waiting on this financial timebomb to go off and wipe out the whole world; and we were out there counting bodies and sweeping the streets thinking the worst was over.
You just clarified what I said earlier, where most of the hard cash that was supporting the market, went suddenly into commodities all too quickly.
This more or less pulled the rug out from under the credit based investors. Which is why stock trading has been cut in half.
I was one of them who bought Oil and other commodities. I am now waiting for that aspect of the markets to kick in when only solvent material assets will have the most value. And it will come to that eventually.
I read this as best I could ...There are a lot of reference to things done under Clinton (Rubin) which caused all the problems
Where was your money when you lost it? A bank? Investment company?
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