There was an interesting article in my local paper today. It was about Satyajit Das, risk consultant and author of "Traders, Guns and Money", he was one of the first people to warn about the global financial crisis (GFC).
Quote:
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What we are creating at the moment is one last round of drinks at the bar. We've been defying financial gravity for 20 years and it can't go on. At some point in time these new bubbles that we've created to get out of old bubbles will pop and then of course there are no more bubbles and we'll have a lot of flat beer. What we are seeing here is a very dangerous phenomenom where the financial markets have suddenly decided things are over and they are anticipating, effectively recovery, so they are actually boosting things like share prices, massively. They could well be in for a negative experience down the track. and of course next time that happens there will be no support because governments are essentially now at the limits of what they can do
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Our newspapers revealed recently that the value of OVER THE COUNTER derivatives had dropped from 600+ trillion to around 592 trillion dollars due to the GFC. The US government has said that it's new regulation will be a clearing house for derivatives that are NOT TRADED OVER THE COUNTER. So conservatively we could be talking about 1500-2000 trillion worth of derivatives in total, but we'll probably never know.
'The plea of BeiBionn'
You can have your magic beans Jack
your children are hungry and we need the cow back.
The lack of just terms and equitable or fair pacts
expose all crooked beanstalks to concerted attacks.
Unless obsessive cycles are stopped in their tracks
our towns will again be as flat as tacks.
You have been too trusting Jack
your childrens futures remain black
while current problems compound through lack.
Struggle earnestly against the pack
repudiate rights to depreciatingly retract
as giants fortress lie ripe for sack.
For only fair shares of the golden goose Jack
will save beanstalks and giants from the axe.
