The Truth Will Scare You

[Streetwise]

Quote from Cutten:

That doesn't spell infinite leverage, or any at all, or even a single CDS transaction. That would require corporate management to *authorize* trading in the products *before* they knew what was going on, and then to keep trading in them *after* they knew what was going on. Or, alternatively, to have had no clue whatsoever throughout the whole process. Either explanation implies total insanity and criminal levels of negligence and incompetence at the corporate CEO and managerial level.

So the real problem is very simple - bad management.

It's not the system that was at fault, it was a bunch of clueless retards within it that are to blame. Notice how many banks and financial institutions did not get hit by this crisis - there are plenty that were run soundly by smart people.

Yeah of course most IB senior management get there from non trading routes mainly buttlicking.

they wouldn't know inflation from menstration.

I mean who in their right mind would buy a CDO based in sub prime loans to 'ninjas' ?

HAHAHAHAHAHA , funny beyond belief.

 

[Capablanca]

Quote from jordanf:

This is from the original article. I think I am gaining a handle on some of this, but I still don't get what happens if we *don't* bail everyone out.

So what if it takes years to sort out a bankruptcy? What does this mean? What happens during those years? Why is this option "untenable"? I hear "worldwide financial meltdown" tossed around but I don't know what that really means, and no one has connected the dots as to how we get from here to complete meltdown.

And I hear Paulson say we need to do this so consumers can start getting car loans again. WTF? Is he saying our financial system will collapse if people stop taking out loans they can't afford to pay back? If so, why not let this house of cards collapse?

Look up something called "The Great Depression". The stock market collapse of 1929 was nothing. It was the later collapse of an Austrian bank that precipitated the carnage that followed. It's from such a lesson that people now know there are things such as banks that are too big to fail.

For less dire examples, alternatively look at Japan since the 1990s. Or maybe you can study what happened to Southeast Asian countries during the Asian financial crisis of 1997. Maybe the Argentinian debt default might give one an idea of what to expect too. Some of the things to note: 10 years of no economic growth in the first. 80% stock market crash and 50%+ currency devaluation seen in the second. 20% unemployment rate in the third. It's a really lovely picture. Ever wonder why foreigners are distrustful of Americans and their cheerleading rah rah rah for free markets?

Really people here seem to be completely oblivious to the dangerous implications.