scearybeary

Welcome to the World of Dr. FrankenFinance

The article is just fun to read, indeed finance is an offspring of calculated madness, superstition and Vodoo. And it all comes down to one magic word: "valuation". There is no "intrinsic" value to anything in a market economy. The "value" of Tulips changes with the market sentiment from sky high to trash. However the real magic is: it somehow works, though nobody can really tell us how it works. Dr. FrankenFinances economic theories are probably as good as any Economy Nobel-Prize winner's. Just don't ruin it by spelling Rumpelstilzes real name or deny that the king is in fact wearing cloths. This subprime "mess" is no bigger mess than the lending mess itself. The FED is lending money to the banks based on the "value" of their assets or more precisely on the assumption that there is any value to anything. So why should Mr. and Mrs. USA not get a loan on their blank ass(et)? One real reality about realty is that those houses exist and someone is going inhabit them. The rest is about cooking books and shifting rights in form of Dollar bills.