Friday, Jun 29, 2007
Are We On a Knife End?
Times Online: Sub-prime mess tip of iceberg?
"The warnings from regulators over the dangers of excessive debt applied to complex financial instruments are coming thick and fast. Much too late, alas, for some investors and banks."
The point of no return.
Posted by dobber @ 07:25 PM (44 views) Add Comment
6 Comments
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1. sovietuk said...
Something is becoming clear, the world post asset bubble mess is going to be very different to the world pre asset bubble mess - particularly for millions in the English speaking world. Historical turning point ???
2. japanese uncle said...
The warnings from regulators over the dangers of excessive debt applied to complex financial instruments are coming thick and fast. Much too late, alas, for some investors and banks.
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No more rubbish, indeed. Not making proper warning in a timely fashion and making long overdue 'reasonable' warning later is the worst possible combination, i.e. driving maximum number of parties in a cage and then lock it and put in on fire, to turn it into a death trap. Anyway they after all made a warning however belated it may be, thus are excused, on a familiar 'less than competent defence'. Such warning could have been made full five years ago, or at the very least two years ago, when CDOs were already becoming a talk of the town, and its phoney nature was all very clear even to laymen. Exactly the same trick was clearly observed in the housing market, which reminds me of a scene in the famous 'Chity Chity Bang Bang' in which two kids Jeremy and Jemima were induced by a nasty kids huner disguising as a candyman, chanting "Free icecream, strawberry cream cake,...Everything is free, today..etc" and when the kids rush into a sweets wagon, it suddenly turns into a cage!! "Free(cheap) mortgage, and free(cheap) loans, everything is free(cheap) today" has been the chant by banks and BSs and people with less than reasonable level of intelligence rush into the trap. Now the lid is closed by the skyrocketing IRs! We must be reminded that banks, media and central banks are all manupilated by the same stagehands. Unless you educate yourself with cautious minds, you will keep being squeezed to the last drop of your blood and that is exactly what capitalism is.
3. japanese uncle said...
Incidentally 'English speaking world' must get rid of basically all financial derivative transactions. I mean they should be wholly banned. Also financial business should be far downsized to the one enough to serve the minimum needs of the industry, such as letter of credits, or current account provisions, etc. Insurance is OK as a risk hedging vehicle, but the majority of today's financial derivatives are sheer betting, which might well be peddled by William Hill and Ladbrokes, rather than banks, no difference whatsoever.
4. Vicmac64 said...
How many of these deals and 'scams' could be construed as an 'act of treason'???
5. Stoatgobbler said...
Japanese Uncle, sounds good. We could also tell people where to live, what to wear, what to do for a living, and we could be pretty sure nothing bad would ever happen again. Couldn't we?
6. japanese uncle said...
Freedom of choice must accompany reasonable education, otherwise a society just keep producing sheeple whose only role is getting exploited, which is grossly unfair.
Using unregulated financial vehicle to collect money from the millions, and going bust is the easiest way to build up fortune. Derivative is largely falls into this category. Wheather insurance for instance, is to pay for the loss (say, of the promoter organizing outdoor events) because of the adverse weather, which is fair enough in recovering the loss that actually takes place. But weather derivative pays regardless whether you are affected by bad weather or not, which is simply a betting disguising like a authentic financial vehicle. I believe those who started to sell CDO were well expecting the arrival of this situation unfolding in front of us now. The most vicious ones may well be out of the game by now and enjoying the fruits (or blood).
No one can tell you where to live or what to wear, etc. Its a completely different story.