oh dear: Darling to extend Rock lifeline

[sasguru]

These are just chickens coming home - the big mistake was to create an economy based on debt, in a short term is helps to achieve growth, but in a long term it will lead to serious problems.

You are confusing 2 things here. Yes the personal consumer has taken on large levels of debt in the UK. But the banks' problems are due to other issues - the creation of globalised financial instruments to sell that debt on, as assets.
The problem with the banks is not confined to the UK but is present globally. So other countries, like Germany, may well share in the pain of the Anglo-Saxon debt bonanza.

Perfidious Albion - you've got to laugh.

[AtW]

But the banks' problems are due to other issues - the creation of globalised financial instruments to sell that debt on, as assets.

Solution - any banker that comes up with some whacko derivatives idea or anything with "gearing" in it goes to jail for a minimum of 10 years.

Bankers should do a few simple things - keep money safe and invest them into real businesses, also exchange currency, that's it - everything else has got destabilising effect on the financial system.

Same goes for stock exchanges and all these games with futures, short selling etc: mandatory 20 year sentences for anyone speculating or trying to influence the market, share ownership should be for a minimum of 1 year, otherwise sale leads to serious penalties to avoid speculants.

This is my solution to the world's financial crysis.

HTH

[bored]

Solution - any banker that comes up with some whacko derivatives idea or anything with "gearing" in it goes to jail for a minimum of 10 years.

Bankers should do a few simple things - keep money safe and invest them into real businesses, also exchange currency, that's it - everything else has got destabilising effect on the financial system.

Same goes for stock exchanges and all these games with futures, short selling etc: mandatory 20 year sentences for anyone speculating or trying to influence the market, share ownership should be for a minimum of 1 year, otherwise sale leads to serious penalties to avoid speculants.

This is my solution to the world's financial crysis.

HTH

It's not that simple. The current financial "crisis" (it's not) is a very minor thing on a historical scale.

If you outlaw derivatives it will not make the underlying market risks go away. If lenders underestimate those risks, and subprime mortgages default, someone will have to pay for it. Derivatives help to spread out the risks and they also can help to expose market problems at an early stage.

[AtW]

The current financial "crisis" (it's not) is a very minor thing on a historical scale.

I don't think so. Countries with backwards regimes but with oil suddenly get a lot of cash that they put to all sort of bad uses that will have long term implications to the world. The world role of USA and the West in general is diminishing just like the value of dollar, and the most ridiculous in this is that the West is doing this to itself.

People should spread risks by diversification - most new derivatives created with the sole purpose to gain a few %-s of profits from hot air, basically City chaps are playing very expensive games, when they win those chaps get millions of pounds in bonuses, and when they are, inevitably, lose, then a lot of OTHER people lose their jobs.

[bored]

I don't think so. Countries with backwards regimes but with oil suddenly get a lot of cash that they put to all sort of bad uses that will have long term implications to the world. The world role of USA and the West in general is diminishing just like the value of dollar, and the most ridiculous in this is that the West is doing this to itself.

Hmm, what is the relation between banks failing to correctly price CDOs and backwards regimes with oil?

[sasguru]

Hmm, what is the relation between banks failing to correctly price CDOs and backwards regimes with oil?

You'll have to forgive him. He's not very bright. He can't get rid of his Soviet-style command-economy blinkers.

[AtW]

Hmm, what is the relation between banks failing to correctly price CDOs and backwards regimes with oil?

The relation is simple - the banks are screwing around with yet another "financial instrument" instead of financing R&D that will help avoid dependency on oil.

[wendigo100]

Hmm, what is the relation between banks failing to correctly price CDOs and backwards regimes with oil?

It's called an AtW Leap Of Logic.

Putin will pop up in a minute. He's behind it all.

[AtW]

Putin will pop up in a minute. He's behind it all.

Iran would not be so bold if it was not supported by Putin. Why Putin is in power ? Because oil is high so he can throw some cash around to the people and they will consider him great.

Look at all those guys with AKs in backwards countries - they were supplied by USSR and then Russia. People in backwards countries should not have access to weapons like this at all until they prove to the world that they can use them responsibly.

[sasguru]

The relation is simple - the banks are screwing around with yet another "financial instrument" instead of financing R&D that will help avoid dependency on oil.

You will grow up one day, I expect.