How Wall Street Neary Destroyed the American Economy

[Running_Man]

Another thing is that sometimes these alarmist numbers add up all the total "value" of the derivatives, but many of them are similar "bets" in opposite directions. For example, a $1 billion position of derivatives that rise if the market does one thing may have a corresponding $1 billion position that does just the opposite. The net effect for these in any market is to cancel each other out.

It's like saying someone has a $1,000 long position on SPY and a $1,000 short position on SPY and saying they have $2,000 "at risk" in the market when, for all intents and purposes, they have zero because one bet cancels the other out (minus frictional costs).

Unless one of your two parties is unable to pay due to "liquidity" issues and suddenly your perfect hedge has big problems

 

[lazygood4nothinbum]

 

[cute fuzzy bunny]

I doubt anyone can predict where we are heading to now.

I'll take a stab at it. The markets will suck and wobble around for another couple of months to a year and a half, all the horsepuckey will get worked out of the system, nobody will learn their lesson as a result, we'll pay more in taxes, the markets will start going back up, housing prices will go back up, and hardly anyone around here will live materially different lives as a result of any of this.

Oh, and you'll be able to buy MRE's, gold and bullets for half price around 2 years from now.

 

[jazz4cash]

Almost 2 years ago, Gary North published this article that is of psychic like precision about the crisis we face today. Interestingly enough, the article was hammered by Brewers and Nords, who called the author a nutjob, piglet sodomizer and many other things. Funny how things turn out the way they do.

I don't see much "precision" in being "almost 2 yrs early", but it depends alot on where we go from here.

 

[cute fuzzy bunny]

Just as an FYI, with about 3 minutes of digging I found that in 1986 Gary North predicted that the US would fall apart by 1999. In 1998 he said the Y2K disaster would end civilization as we know it by january 3, 2000.

He said, and I quote "The y2k crisis is systemic. It cannot possibly be fixed. I think it will wipe out every national government in the West. Not just modify them -- destroy them. I honestly think the Federal government will go under. I think the U.S.A. will break up the way the U.S.S.R. did. Call me a dreamer. Call me an optimist. That's what I think."

Jumpin' Jesus...even broken clocks are right twice a day. This guy's been consistently wrong for over 20 years.

And I now redirect you to the "Gary North is a big fat idiot page"

Gary North is a Big Fat Idiot

 

[Sarah in SC]

Ah yes, Gary North...thanks for the refreshing link CFB. While I am not properly certified to be able to say with certainty that he is a piglet victimizer, I do however have as a layman's opinion that he is in fact a whackjob.

 

[harley]

I think we should do the same we do to the drug dealers and drug users. We sent the drug dealers (executives) and the drug users (mortgagees) to rehab.

Actually, I think we send a lot of both to jail. Probably for a lot longer than any of these guys will ever go.

 

[Marquette]

All I want to know is...

Who is Wall Street Neary and where does he live? I'm a go kick his ass now.

 

[saluki9]

This is pretty weak journalism.

Hey now! Don't let facts and figures get in the way of a good piece of infotainment.

The investment banks, insurance companies, and hedge funds that were involved in the CDS market weren't exactly hiding what they were doing. Where was FINRA, the SEC, and the state insurance commissioners?

 

[Retire Soon]

All I want to know is...

Who is Wall Street Neary and where does he live? I'm a go kick his ass now.

Sory for the mistaak

 

[RDamien]

So basically, Gary North has accurately predicted 42 of the last 3 recessions.

 

[cute fuzzy bunny]

While being a complete and total nutjob.

Lets just take one minor little point from his diatribe. He believes that being on the cusp of the end of civilization here in the US, that to effectively prepare one should purchase a mid 80's mercedes diesel.

Because thats what you really want during the period following the apocalypse: A big heavy vehicle that requires good pavement, breaks frequently and is hard to repair, with parts that are hard to come by, and which also screams "Look at me!!! I have money!!!"

It isnt so much that he's predicted 42 of the last 3 recessions as he sincerely hopes for the fall of civilization and has been predicting that continuously for decades.

 

[RDamien]

Everyone knows the V8 interceptor is the car of choice for post apocalypse driving.

 

[ziggy29]

Someone could be wrong about the sky falling 100 times before a chunk of it actually does fall... and suddenly they are a genius and a market guru...

 

[kathyet]

at the barmitzva scavenger hunt, the kids had run back to the dj with a sock with a hole in it, his scam being that every sock has a "hole" in it, the "hole" you stick your foot through to put the sock on.

thing is, that's not what a hole in a sock is. just like the top of a glass where you place your lips to drink is not a hole in a glass. a hole in a glass (a cup) is an opening from where the glass would leak, contrary to its function. that is how we derive meaning. misuse of meaning when not simply used to play a joke, but to defraud, is called a scam.

i don't believe for a second that everyone didn't know what they were doing. words have meaning. context has meaning, application has meaning. to say that a swap is not insurance is ludicrous. this is called a scam. plain and simple. since when isn't scamming prosecutable.

And if you don't believe that want to make a side bet!!!!

 

[ladelfina]

How is a 20 y.o. car that costs $1000 gonna scream "money" I think North's point was probably that those engines can go 500,000+ miles and can also be converted to use cooking oil or hair grease if need be.

He may be a nutcase, but there are certainly some prudent aspects to many a nutcases' warnings. What are your feelings on the "fundamentals are sound" people from just a few weeks back??

 

[Marquette]

Sory for the mistaak

Oh man, now you tell me that things won't get better if I just go punch Neary in the face... I hope he doesn't remember much.

 

[ladelfina]

probably posted elsewhere here.. but certainly worth another viewing:

YouTube - Subprime crisis explanation by The Long Johns

 

[CCdaCE]

Everyone knows the V8 interceptor is the car of choice for post apocalypse driving.

No, it's a mustang or a suburban. I saw Will Smith in one in "I am Legend".

-CC

 

[cute fuzzy bunny]

Thing is, he had all the cars and gas in the world pretty much to himself.

What happens after a year or so when all that gas goes bad?

 

[Marquette]

Thing is, he had all the cars and gas in the world pretty much to himself.

What happens after a year or so when all that gas goes bad?

Then it'd be a real bad gas movie.

 

[ladelfina]

plenty o' hair grease, esp. considering the lack o' soap.

 

[lazygood4nothinbum]

And if you don't believe that want to make a side bet!!!!

you must know my [-]bookie[/-] banker



entirely unrelated to charlie above, i came across The Baseline Scenario while watching simon johnson on cspan's washington journal.

This site presents our baseline view of what is happening in the global economy and hosts an open discussion of the issues that matter to our readers. We publish a weekly Baseline article (current version online or pdf) that includes analysis of the current situation and our policy proposals.

there i found reference to a very interesting explanation of what gave rise to this mess. accordingly, as best i can understand them, the fault lies not with american homeowners but that they were patsies of a Global Pool of Money Got Too Hungry : NPR

click "listen now" for your listening pleasure.

 

[Retire Soon]

Oh man, now you tell me that things won't get better if I just go punch Neary in the face... I hope he doesn't remember much.

Here is a picture of Neary, so you'll recognize him when you see him: