mlambert890

Dollar Falls on Lowest Consumer Sentiment in 28 Years

Wow... thats a lot of oversimplification in one small paragraph. Bear profited from the shell game of increasingly synthetic derivatives and was way over leveredged.

Their largest CDS partner was JPMC. Banks were starting to shut Bear out and their ability to meet their obligations was coming into serious question.

If nothing had been done at all, Bear *would* have slipped into bankruptcy and defaulted on ALL of its obligations including trillions in CDS exposure.

The real problem is that most people ranting and raving about these issues, and weighing in as "experts" and even some of those making policy, have NO CLUE what any of it means much less how one would beging to unravel this ball of string.

Synthetic instruments have become increasingly abstracted from anything approaching real value and the govt has allowed that to happen. Now there isnt enough physical capital in circulation to cover the leverage exposure. Simply allowing everything to organically meltdown so you can say there is "NO CORPORATE WELFARE" would lead to an outcome I dont think many people would like even if they are too stupid to realize it.

Rather than talking in broad conspiracies and making loose historical connections that are, when examined in detail, really vaporous, more people should take the time to try to really learn what is going on here and what lead to it.