You ramble on about my mother, and about me personally because you didn’t like my point that large banks did stupid things, blinded by greed, and caused a lot of innocent people tears, strife and destitution, and I haven’t said one unkind word to you. Which one of us is the 13 year old?
Say what you want about my mother but she raised a damn sight better than yours apparently raised you.
Further, which group of banks where complete fail at evaluating credit and butt fucked the economy with a cactus? You say an IOU is more secure from Bill Gates, but even retard can see that’s not so if Bill Gates has more in IOUs out than money.
Why were banking executives so fucking stupid?
I thought you called me a cactus buttfucker, or some such.
I called large banks cactus butt fuckers. Are you a large bank?
Unless I’m mistaken, he does work in the financial services sector.
I’ll answer this one very nicely:
If you had the money, you wouldn’t need to write an IOU. The only time you write an IOU is when you don’t have enough money.
So, when you ask that question I can’t help but chuckle a little bit about who’s calling who “fucking stupid.”
The value of an IOU from a credit standpoint is dependent less on the current assets of the lendee than I think you are aware of. A bank does not wish to own assets and take away collateral. They simply wish to get paid. Therefore, the most operative function in evaluating the merits of making a loan or not, is not assets, but cash flow.
It is the future cash flow of the lendee that will best determine the ability of that entity to pay back the loan in a timely fashion.
So, loaning somebody more money than they have is logical reasonable and common.
ok?
In the sense that a cog is a part of an engine… yes.
At a large bank? If so, and if his actions were a part of the cause of this mess then I have said unkind words and he had them coming.
If he’s the janitor at one, well you can’t hate the janitor. Word to the janitors at large banks: you’re okay people, unless you’re not for other reasons.
Yes.
So, you think.
So how come economy was trashed? It looks to me like there was massive strings of default credit swaps. Are bankers too snooty to know how dominos work?
Again that is preciously what happened.
Your coworkers stacked up a bunch of CDS with no ability to pay them off. Just like the Bill Gates IOU hypothetical.
Tell me they didn’t.
You can’t because millions wouldn’t be out of work if they hadn’t.
.
Also the claim no one saw this coming is without merit.
from: Credit Crisis? Just Wait for a Replay
By FLOYD NORRIS
Published: December 28, 2007
Again, dominoes. One tips over and tips over so many with it. More IOU type things than money.
You’re saying a anyone who wasn’t a retard couldn’t see any potential huge economic risks with this?
http://www.time.com/time/business/article/0,8599,1723152,00.html
Monday, Mar. 17, 2008
Credit Default Swaps: The Next Crisis?
Does that seem cover-able with future cash flows?
Edit: here’s the thing. I don’t believe in judging a person by their associates, usually, so I’ll even say you might be a good person, but you’re hanging with a bad crowd.
Tao:
I’ve kind of summarized the credit crisis in some other posts, but really, from what you are posting, you don’t have enough of a grasp on it for me to help you understand it. If you google Kahn Academy, you will see that he has created a lot of short, easy to understand presentations that will take you through the basic concepts, so that you can have a good grasp on what happened.
Than, I think you will have the ability to form an opinion with value.
No insult intended.
It’s so adorable that you think you’re an authority on anything but funny blimp stories.
I mean, of COURSE the correct answer just HAPPENS to be the one that makes you and your employers out to be the smartest guys on the planet who just got caught off guard by this.
Oh, and responding to cites from respectable publications with “go visit Kahn Academy before I talk to you”? Fucking priceless. Comedy gold.
Says the IT drone to the financier. Get a clue.
If I had said this perhaps you might have a point.
Yeah. The way he is using the pieces he quoted really doesn’t support the argument he is making.
In all sincerity, there are concepts here that you just don’t understand.
My point is not that the finance industry is innocent. It’s not. But there is a lot of guilt to go around, and most of us in this industry are hardworking caring people who give a shit and believe in what we are doing. Like most folks in most industries.
There is frankly a very fucking stupid viewpoint being held by intelligent people that should no better that the banking industry is the cause of the current crisis. It’s dangerous simplistic and self indulgent.
I’m surprised because I would think that people who work with technology like yourself or other professionals would have learned by now to be careful with their assumptions.
Apparently you have not or are deliberately ignoring that lesson. That’s why I do Derbyshire if you are really a kid. You act like one.
I’ll explain something about CDS’ that you probably didn’t know. Since they are a form of insurance let me use an analogy.
Mbia and ambac basically insured everything that was insurable in the finical markets. So, if you buy a municipal bond that is ensured by Ambac what do you think that insurance is protecting you from?
Ambac can’t pay for everything it covers if everything defaults, right? So, when you have an Ambac insured bond what you are really covering yourself against is “specific risk.”. Your bond defaults. You really aren’t covered against “market risk”. All bonds defaulting.
Same thing with CDS’. They can cover you against specific risk. That’s why they are So cheap.
So, this outrage that the issuers can’t cover everything is misplaced. Nobody who knew what they were doing seriously Expected them too.
In all sincerity, I’m not concerned about the worker bees. I’m sure you’re a fine, upstanding citizen who’d never make ridiculously dangerous new financial instrument types and the get a gigantic handout that comes straight from my pocket when they fuck up the entire economy.
Look, man. Bank/finance sector profits are on the same level and trajectory as they were before the crash. Aside from 2008, you guys haven’t had a bad year while the rest of us are digging ourselves out of the hole YOU GUYS created with your worthless CDS instruments and deceptive, poorly rated CDO instruments.
So yeah, fuck the entire industry you work for. The more I think about it, and the more you try to defend it, the more I just want to burn it all down and dance in the ashes, then make you pay me for my fire creation and choreography services because I’m too big to fail. Just like you fuckers did to the rest of us.
Amen.
Bri2k
Yea, I don’t think that’s gonna work.
Look, I get the anger. And I feel it too. But I think that what Scylla is trying to say is that the Banking Industry, while having their hands pretty dirty, is not soley responsible for the mess and that said is mess is much more complicated than most of us can fathom. Taking action against only the most visible part of the problem may have disastrous consequences.
Simple and quick solutions to complex problems are very rare.
Sure it’d work, it’d just also cause other problems.
I disagree wholeheartedly. The problem is not as complex as Scylla is trying to make it. It’s very simple–financial institutions should not be in the business of inventing new securities that are inadequately or not-at-all backed.
God damn right.
Lamp post, rope, banker.