Oh Dear: Uber Doomed & Deja Vu

[DimPrawn]

It's different this time

Steps to the boom

1. Flood the world with cheap money.
2. Lend to those who cannot afford to pay it back
3. Repackage the loans as AAA rated securities and sell to pension funds, thereby removing the debt from your books and allowing you to lend again.
4. Goto step 1

Continue this forever and we'll all be billionaires.

HTH

[sasguru]

Sas you Uber Cretin,

you think everything's rosy eh ?

You know how long ago that book was written you plonker

Milan.

Milan you meta-cretin, no I don't think everything's rosy. I know when that sensational momey-making book was written yes. And what happened in 1929 will not happen now because the authorities then actually tightened up the credit system. Central bankers have learned from that and given the choice of 2 evils I'm betting they'll tolerate even a sharp inflationary rise and flood the market with cheap liquidity as they are already starting to do.

[milanbenes]

Admins,

can we make a sticky post for Sas the Uber-Cretin's famous last word,

'And what happened in 1929 will not happen now because',



Sas, at the end of the day, I hope you are correct, but in fairness I have been hearing the same that this will be a soft landing as £$£ are pumped into the systems starting the whole growth cycle over again

onwards and upwards folks


Milan.

[sasguru]

Admins,

can we make a sticky post for Sas the Uber-Cretin's famous last word,

'And what happened in 1929 will not happen now because',



Sas, at the end of the day, I hope you are correct, but in fairness I have been hearing the same that this will be a soft landing as £$£ are pumped into the systems starting the whole growth cycle over again

onwards and upwards folks


Milan.

Well OK insults aside, the basic problem is that inflationary pressures are arising just as liquidity needs to be injected. The skill of the central bankers in balancing the two will be key to how much suffering there is.
More fundamentally what's happening in the world economy is a shift from debt-laden Anglo-Saxon economies living beyond their means to productive economies. The shift can't happen without a deal of pain.

[DimPrawn]

Well OK insults aside, the basic problem is that inflationary pressures are arising just as liquidity needs to be injected. The skill of the central bankers in balancing the two will be key to how much suffering there is.
More fundamentally what's happening in the world economy is a shift from debt-laden Anglo-Saxon economies living beyond their means to productive economies. The shift can't happen without a deal of pain.

Isn't this what AtW argues and you disagree with?

[Dow Jones]

Pleeease!

DP, don't encourage him !

[sasguru]

Isn't this what AtW argues and you disagree with?

I have to disagree with whatever atw says, as a matter of principle.
But he doesn't say precisely this, he argues that us having manufacturing industry would solve the problem, which it won't.
My argument is that we consume more than we produce both on a country level and on a personal level. Now the chickens have come home.

[Dow Jones]

His fault

But he and his compatriots, Poles, etc are partly to blame for, as they don't spend anything here. All the money they earn, instead of being pumped back into the economy, it goes out of the country to the tune of £ 5 bn a year. Wrong?

[bobhope]

So, the world has a problem caused by lax lending standards and too much credit?

So what do central bankers do to cure the problem: try to increase credit.

flogging's too good for them

[Xenophon]

It's different this time

Steps to the boom

1. Flood the world with cheap money.
2. Lend to those who cannot afford to pay it back
3. Repackage the loans as AAA rated securities and sell to pension funds, thereby removing the debt from your books and allowing you to lend again.
4. Goto step 1

Continue this forever and we'll all be billionaires.

HTH

This is a great plan and works. However, my current client is having a real problem with step 3. I am managing the securitisation project. Bad news is that there are no investors...hehe...