Credit Crunch - blame David Bowie

[threaded]

Aaaaactually, the credit crunch is caused by employment policies like McDs, trading policies like Enron, accountancy practices used by companies like M$ and voters thinking a nice smile is a good enough qualification to run a country.

The Derivative Death Star and all that other verbiage is just cruft obscuring the real problems. The fun and games: reselling resales in a ring, and that is what the DDS is, is exactly the same problem that took loads of Lloyds Names out years ago. All that took to solve that, and will solve this problem, is to allow some to go bang.

Allowing Banks to go bust, or throwing money at them, makes no difference whatsoever, as that is not the cause of the credit crunch itself.

[BrilloPad]

Of course David Bowie's records was the first ever securitization deal.

[Bagpuss]

Cybertory caused the credit crunch. The only thing that can stop it/him driving us all suicidal is his death. A small price to pay for the nations sanity

[FrankieB]

Now everything is not Hunky Dory.

The world has now gone to the Dogs, and not diamond one's either.

[Alf W]

I was making the point that the Chav Press are sinking to ridiculous and protracted levels of nonsense in order to get column inches out of the 'Credit Crunch'.

[AlfredJPruffock]

I take it you mean Alf W Tim ?

[tim123]

Yeah?

So what point are you making Alf?

The reason why what Bowie did and what the banks did is different and why it works for Bowie and not for the banks, is that Bowie sold his "paper" to an independent third party who just wanted the income. The banks sold their paper to another bank, a bank that also had paper to sell.

Effectively (via a nice long merry-go-round) Bank A sold its securitised loans to Bank B, and Bank B sold its securitised loans to Bank A. Yet both Bank A and Bank B thought that they had an extra billion in the kitty to lend out. It's no wonder that it didn't work.

tim

[AlfredJPruffock]

It's the theater of financiers
Count them, fifteen 'round a table
White and dressed to kill
But now
We're today's scrambled creatures, locked in tomorrow's double feature

Heaven's on the pillow, its silence competes with hell
It's a twenty-four hour service, guaranteed to make you tell

And the streets are full of press men
Bent on getting hung and buried
And the legendary curtains are drawn 'round Baby Bankrupt
Who sucks you while you're sleeping

Because of all weve seen

We Are the Dead ...
We Are the Dead ...


DAVID BOWIE _ WE ARE THE DEAD_FROM DIAMOND DOGS_STAYCOOL_DIAMOND_DOGS_RULE

[Ruprect]

I blame it on Young Americans

[DimPrawn]

This is why mortgage (debt) is an asset and holding savers money is a liability.

It was a great scam though. Shame the man behind the curtain has been revealed.

[Alf W]

http://www.mirror.co.uk/news/top-sto...5875-21036649/

He’s always been a trendsetter. But could David Bowie have caused the latest fad sweeping the nation – the credit crunch?

It may sound like a ridiculous question, but it’s not as mad as it seems.

Even when it comes to finances Bowie leads the way – and back in 1997 he did something called “securitisation”.

He thought, “I have a lot of money coming in over the next 10 years from my back catalogue, but I’d rather have the cash now and not have to wait”.

He produced some bits of paper – Bowie Bonds – and said “whoever buys these gets my royalties”.

It meant he no longer had the money coming in but instead had a lot up front. His investors were guaranteed a good income. It was a good deal all round.

And the banks were catching on to the idea. They thought, “We have billions out there in mortgages which are going to pay us back very slowly. Why don’t we sell those and get the money now?”

So the banks started doing what Bowie had done – in a big way.

It was a complete rebuilding of what a bank does. Normally a bank borrows from people like you and I, then lends it out.

But now the bank was lending the money – and selling the loan on elsewhere.

For example, a bank loans out £100,000 for a mortgage, and does the same for 10,000 people. They’ve now lent £1billion and will be getting the cash back over the next 25 years.

So the bank creates a piece of paper, a security, and says whoever owns it will have the income from the mortgages.

It then sells the security – effectively the bundle of mortgages – for £1billion to perhaps a pension fund, which then has the mortgage income – and the bank has £1billion to lend out again.

Everybody is happy: the banks are able to lend more and more as mortgages, and there’s a conveyor belt where they lend a billion, receive a billion and sell the mortgages on.

Northern Rock were the market leaders in the UK for this kind of thing.