Part Three What I have argued so far tries to describe how the system was poisoned and why it ‘froze’ as suddenly as it did. What I want to argue now is far more important. I want to show how Securitization and the Shadow Banking System, will, by necessity of their design, always accelerate towards …
Risk – the devil inside Whenever someone buys a security they do so because they want the promised return on their money. What they don’t want is the Risk that goes with it. Risk and return are the light and shade of finance. You can’t get one without the other. But the promise that you …
At the centre of all debates about the Banking crisis, the shadow Banking system and the bank bail-outs is Debt. For a long time I have been arguing that what this debt is, is in fact a new, bank created, bank issued and ultimately bank debased debt-backed currency. And the collapse in value of this …
Securitization – the Undead heart of the Shadow banking machine Read More »
What are our leaders going to do next about the state of the banks and broader financial system? We have had the US bail-out (TARP) and various stimulus measures. We have had the European Bail-out. Or the announcement of it. It still isn’t quite through all the parliamentary hoops yet. And we have had the …
According to an article in the New York Times (Thanks to Lars Eirik for noticing and posting) on the 27th of July, two economists Alan Blinder, a Princeton professor, former Clinton advisor and former board member of the Fed, and Mr Zandl chief economist at Moody’s Analytics claim that with a “complex quantitative model”, they …
Did you know that the Hindenburg zeppelin had been rigorously stress tested? And that the design of the Maginot line was almost impregnable? Everything that has ever sunk, exploded, tipped over, burst into flames, fallen down or simply not worked had been stress tested in its day. The problem is that stress tests are rarely …
Owe a man ten pounds and he has power over you. Owe him ten thousand pounds and he has a lot of power over you. But owe him ten million or ten billion and YOU have power over HIM. Debt is more fickle and slippery than money or direct wealth but it still has power. …
I have written for a while now about how I see a clear division and open opposition hardening between the US and Europe, Washington and Berlin, the FED/IMF and the ECB. Well today we got to see that opposition break out into the open. The FED and the ECB are now on a collision course. …
For those of you who felt perhaps the financial world might have been lying about how they have learned their lesson and reformed their ways – this one is for you. Sometimes you just have to sigh. DETROIT (AP) — General Motors Co. will buy AmeriCredit Corp. for $3.5 billion, a deal that allows the …
The markets waited with baited breath. Bernanke began to speak ….. and the Dow plunged straight down. As soon as he said the words, “remains unusually uncertain”, about the outlook for the US economy, the markets fell over, while the VIX, the measure of volatilty, went the other way. Are we really to believe that …
