Oh. My. God. How the econopocalypse happened

[elfs]

Porfolio.com has a long article that explains, in excruiating, on-the-ground detail, how the econopocalypse came upon us: The End of Wall Street's BoomIf you read nothing else about the stock market, read this. It helps to make sense of it all. It helps to understand how the movement of money through Wall Street, with each layer taking its cut,

Comments

[en_ki]

The pyramid had a bunch of suckers at the bottom. The bailout turns those people from suckers into happy crooks and makes the rest of us into the last layer of suckers.

The fewer layers there are, the fewer victims there are and the fewer happy crooks.

The right outcome for this is that those of us who stayed out, and therefore aren't under water on our mortgages or failing to make our margin calls, can buy real estate at reasonable prices and clean up by picking the good securities out of the fire sale. The bailout is serving to prevent that.

Yeah, that's why the patient died.

[ideaphile]

Unfortunately, this piece doesn't explain why the patient got sick in the first place. That makes it pretty much impossible to prevent the disease next time.

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Re: Yeah, that's why the patient died.

[ideaphile]

uhm.... don't do that ?

Re: Yeah, that's why the patient died.

[ideaphile]

Don't do what? Don't let people be greedy and stupid? Good luck with that.

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[ewhac]

This piece has been going around, and it's an excellent piece. But everyone highlights this one paragraph. Even after reading it for the fourth time, I still don't get it. Is he talking about a genuinely non-existent loan, fraudulently created to sell a CDS against? Or is he using the concept of a loan as a rhetorical stand-in for another CDS, in an attempt to describe swaps insuring swaps insuring swaps? He flips between heavily overloaded terminology too quickly...