http://finance.yahoo.com/banking-budgeting/article/105802/Street-Scenes:-The-Players-Remaking-Financial-World?mod=weekend
Mr Bush has initiated the whole stuff whit everything, the Fed has thrown out tons of money and does again. Oh no they are surely “heroes.” If that is believed by anyone than it’s clear who will win the elections, there’s not choice but Republicans.
Quite interesting reads is also. I cite from
http://quote.yahoo.com/banking-budgeting/article/105788/Diamond-and-Kashyap-on-the-Recent-Financial-Upheavals
“The inability to secure short-term funding fundamentally comes from having insufficient capital. There are many indicators that the largest financial institutions are collectively short of capital.”
We can translate that too. Because it is allowed to lend more than you can back up (considerably more) you are messed up if just a few debts will get lost. Example assume for every US-$ capital you can lend 5 US-$. So that means as long as most debts are paid, you have an exceptional high return on your own capital. Now things have turned sour, the leverage is working against you. You can survive one thierd of jour loaned money getting busted. With all this levarage in the market the Investment banks have made such big money.
The argument about why Lehmann was not saved are just “bla bla”. If Bear Stearns would not have been maybe Lehmann Brothers would have been saved. It seems that even the central banks did not have enough clues on how bad the situation in the markets was. A bit here a bit there and all would have gone well has not worked.
Fact is never have politicians or bureucrats have acted like that in a supposed to be private economy.
We’ll see some books soon, on how all this will be justified. It will start with: “We could not let them down, because … “
The fundamental problem still persists, spending more than you have. No authority, no central bank can finance that any time. The great disaster was avoided, a bigger is lurking around.
I do not believe anything any longer which will follow, it’s discussing against all truth. It’s make believe to I want believe I believe….
Not really a sound foundation.