This page contains a single entry from the blog posted on August 11, 2011 8:55 PM. The previous post in this blog was I can't wait for the perp walk. The next post in this blog is A true bombshell. Many more can be found on the main index page or by looking through the archives.

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Thursday, August 11, 2011

European stock markets on the brink

Hold on to your hat.

Comments (7)

Another example of people in power not understanding how things truly work. Short sellers buy later. So, while they make money on the fall of a stock, they do have to buy it in the future at that lower price. Without short sellers the market can free fall. And what they are telling us by banning it is there may be a great deal of pain ahead. http://www.thestar.com/Business/article/502625 check the date.

I remember the night well. It was several years back, and someone on this blog had just called me out for not really knowing what a derivative was, so I plunged in. Several articles later I was faced with the reason all this has happened: Derivatives created a 600 trillion dollar financial exposure. A few thousand Wall Street types along with their counterparts in Europe, started selling insurance on baskets of subprime mortgages, just to generate a commission.
If we could have gathered all these people and offered them 10 trillion dollars to walk away, we would be fine right now.
Instead, this one reckless greedfest, basically taking off in 2005, has led the entire economy of the world to the brink in just a few years.

Meanwhile, most people still have no idea how or why it happened. I talked with someone today who has degrees for days, and I was told this was all because we are transitioning out of a manufacturing economy. No, it's the derivatives.

It's all part of a strategy: The country spends most of its time hating Obama or the Tea Party while the controlled media refuses to explore what really went down. The perpetrators of the biggest fraud in history slide free, only surfacing to try and cover up their roles or get their kid a soccer stadium.
It's crazy.

This is the most frustrating situation ever, because the gains were so small relative to the 600 trillion in financial exposure that is currently unraveling. And the cost to the People of the world will be so great.

If we could have approached Henry Paulson while he was heading Goldman Sachs and offered him a trillion not to put Greece in this situation, it would have been money well-spent.
The problem is that when the calls come in, the whole crazy thing starts unraveling and there is no way to deal with a 600 trillion dollar call. That's why the Fed just threw 16 trillion at this and it didn't even make a dent.

What I learned that dark night was that derivatives have put us in an impossible financial position. The final irony is that society could become so dangerous that even the people who made billions shorting this collapse, will be afraid to get in the limos and go out for a night on the town.

This is the ultimate screw-up and there is no peaceful way out.

Then again I just watched my Philadelphia Eagles play and it's looking pretty good.

London calling.

Yeah, because the temporary ban on short sales here in the US in 2008 completely saved the DJIA from crashing through the floor...

Good description of events, Bill.
And yes, the "bread and circuses" will keep the peace...for a while. Then think Margaret Attwood novels, and "The Road" for the next hundreds of years.
I am glad I don't have children!

Katy bar the door.

Dump the derivatives in Boston Harbor and fire the first volleys at Wall St.

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