APEC 2024 Peru. Biden shafted to a corner in the back row. Xi in front row next to Peru's President
11/24/2008
Can you believe it?
Just a few months, and all the iconic institutions of the USA are bankrupt? From investment banks, financial institutions, airlines and the three auto giants, are collapsing? What else is going down?
All the hype about AAA ratings of American institutions seemed so real and now a fairy tale. Institutions that are sound, and of that size, cannot be wiped out overnight. The rot must have started long ago. The only problem is that the rot was hidden, concealed, and outside parties are not allowed to know. In fact all the thieves were paying themselves ridiculous salaries and perks and churning out glorious figures of growth and profits.
Where is the transparency, accountability and responsibility? Big names never fail, very reliable, proven with good track records. And managed by the best talents money can find.
This problem had already been known to surface much longer than they care to admit, but all along they pretended that it will be containable and that it will blow over easily, like the way they print money out of thin air.
ReplyDeleteAnd, like us, they were always talking about the fundamentals being sound etc etc. Sometimes problems just don;t go away with time, it festers and it gets worse if not attended to. But they have been living in denial for a long time.
Who is to blame? I would blame everyone in the US, the Govt for not taking action to stop the malpractices, the greedy bankers for going overboard in lending and making hay while the sun shines, realising that the US govt condone their practices and the American public for thinking all along that money can be had in just buying and selling properties without producing anything in exchange.
you are right. printing a piece of paper to collect money. very familiar. even erecting erps is not much differenct. no productivity, just collecting money.
ReplyDeletethe investment banks and funds were the biggest culprits. the banks thought it was brilliant to package toxic products and exchange them for money. the fund managers thought that by rigging or fixing the stock market or financial exchanges, they could make money with no respect to the fundamentals of the business.
we are seeing the same thing happening in our stockmarket. big funds fixing the market up and down at will, and sucking money from the small investors, driving stocks to below their NAV.
and no one is stopping the music.
why is it that nobody is at fault? all the top managers were so innocent and doing their best?
ReplyDeleteDear redbean,
ReplyDeleteMost western countries arround the world are banning short selling as you pointed out earlier. However China is introducing short selling to equity investors ;)
i think china is learning from us. short selling may still be acceptable when the market is big enough, a lot of players. otherwise, it is suicidal.
ReplyDeleteours is a matter of time.