oldsuretyguy

In Madoff We Trust

Excellent article and well written.

Great Depression Not Imminent, But Inevitable

Those investment groups who previously relyed on CDS guarantees from unwilling insurers will no doubt have their wings clipped in the current CDS market. And, funding for legitimate projects will have to make their case through more traditional avenues of borrowing. The decline of CDS guarantees will probably have a major slowing effect in those various economies expecting CDS lending support. Is that bad? Probably not....... If the only way a financing program can be funded is through CDS support, then it's economic viability is probably questionable anyway. I believe that whole proposition of underwriting credit default swaps was launched without more than a short term return in mind and then quickly gained favor along with the derivative market. CDS's or credit guarantees from an insurance/surety perspective, proved themselves losers over 60 years ago and subsequently considered untouchable by legitimate underwriting companies and their reinsurers. But without regulatory oversight in this financial area, I mean why not sell CDS's to anyone that will buy them? Wouldn't this follow any normal business mentality particularly where you have a vast brokerage sales force with no skin in the game. But, of course this like a Madoff ponzzi scheme, only works in a growing economy and inevitability crash during an economic down turn. Several large prominent domestic insurers have experienced enormous underwriting losses from newly hired company jumping CEO's who have maximized short term corporate and personal profits by cutting costs and premiums and booking tons of unprofitable business. They leave and move their team to the next desperate company and create the same business model over again. Good money in this if you stay ahead of the nuclear winter left in your wake!

Our Economic Crisis: The Grand Experiment

Politics = Corruption. Every government on earth is corrupt by definition. We've given some of the world's worst despots a primer on corruption.


On Dec 15 10:25 AM xmplary wrote:

> We were told many things that were wrong. The politics here seems
> to be getting as corrupt as those of the 3rd world countries. Just
> look at the Illinois Governor for an example. Wall Street has become
> a place for even bigger and bolder scammers as well. If we can't
> count on the people that are supposed to represent us, who can we
> trust?

Our Economic Crisis: The Grand Experiment

Around the turn of the last century, our government leaders distrusted and were at odds with Wall Street bankers, ie Morgan, having just rescued the country from the robber barons. A few decades later a couple of banking acts were passed to protect the country from manipulative Wall Street banking behavior. Memory, however, is short and It would appear that when we (deregulate) fall asleep at the wheel and turn the entire US financial system over to the bankers....this is what we get. Too little regulation of the financial system and too many cronies in each others pockets for the mere citizen to get a fair shake. It takes a "melt down" as we are seeing now for things to change. By then, the very wealthy will have swallowed another large slice of the soft US underbelly at pennies on the dollar. Since the bankers control the US financial system, is it any wonder they got paid off first($700B) at taxpayers expense?