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re: "Alan Greenspan Blasts Trump's Tariffs as "Insane"" Bloomberg
Posted on 11/15/18 at 11:02 am to 0
Posted on 11/15/18 at 11:02 am to 0
That is true.
Those banks were buying and creating derivatives on loan packages in such large volumes that no entity could have the capital to stand behind them.
It was really crazy nobody every questioned them. They would sell default derivatives on the same packages of loans hundreds of times and no one every said "can you financially cover these commitments if the package declines in value 5%?"
Those banks were buying and creating derivatives on loan packages in such large volumes that no entity could have the capital to stand behind them.
It was really crazy nobody every questioned them. They would sell default derivatives on the same packages of loans hundreds of times and no one every said "can you financially cover these commitments if the package declines in value 5%?"
3
Posted on 11/15/18 at 11:03 am to I B Freeman
Admins: we really need that IB Screamin' board
Posted on 11/15/18 at 11:04 am to I B Freeman
quote:
That is true.
Those banks were buying and creating derivatives on loan packages in such large volumes that no entity could have the capital to stand behind them.
It was really crazy nobody every questioned them. They would sell default derivatives on the same packages of loans hundreds of times and no one every said "can you financially cover these commitments if the package declines in value 5%?"
The bottom line is if the credit agencies would have rated the MBS's accurately those derivatives would have been fine. The failure happen because risks was not properly evaluated.
Posted on 11/15/18 at 11:14 am to I B Freeman
quote:
can you financially cover these commitments if the package declines in value 5%?"
AIG said hold muh beer...
But then again, what could go wrong if we give banks free money???
And here is the real kicker...we ain't done dealing with this 10 years after the shiite storm that Greenspan gave us...
Many companies, homeowners, and the govt etc have gotten used to cheap money...now there will be a noticeable cost to capital (which, while more fundamentally sound), will cause increased pricing, inflation pressures, and eventually, economic slow down...
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