Capitalism Goes Short On It's Own Death
It's the sad truth that when people profit on bad things happening, rest assured that we'll see them occur. Here's positive proof capitalism is total insanity.
Guess who will be tapped to cover unlimited losses?
Citi plans crisis derivatives
"Credit specialists at Citi are considering launching the first derivatives intended to pay out in the event of a financial crisis"
Guess who will be tapped to cover unlimited losses?
Citi plans crisis derivatives
"Credit specialists at Citi are considering launching the first derivatives intended to pay out in the event of a financial crisis"
posted by nolocontendere at 5:17 AM
2 Comments:
I just finished reading an article about the subprime crisis which. It's called The End of Wall Street. It's a great read if you have the time.
Wall Street is completely obsolete. It could easily be replaced by modern technology. It is in its death throes and seems to be intent on taking down society with it. (I wrote an article which touches on this theme a while back titled "Time for a new financial system".)
Anyway if you read "The End of Wall Street" article you'll get the impression that Wall Street was pretty much shorting its own death via the subprime mess. And it wasn't just shorting it but, it was creating the scenario that would actually create its own fall.
Basically Wall Street and the Fed pumped money to low income home buyers to create the housing bubble. Then Wall Street got the rating agencies to go along with the scam. Fraud was the order of the day. Eventually they popped the bubble and some people like John Paulson (not Hank Paulson) got very rich.
Now Citi is trying to make an instant version of this whole scheme. The comments on the article you link to are very interesting. One commenter makes the point that in a financial crisis, there is no one that will be able to pay off on the debts - except for the government, which really means the taxpayers. Looks like were headed to a Medieval system of Lords and serfs.
Shorting should not be allowed, period. When you short, you sell - driving down the price. But you have to buy it back later - driving the price back up - which just creates volatility. Who benefits from this other than a few insiders?
Like the author of the article at that link, and thank you, if you told me back in the 80s that this criminal mess would last another 20 years, I would have thought you were nuts.
You know, one of the reasons put forth for this clash of civs between the west and islam is that their religion prohibits the stupid shenanigans that are about to explode.
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