There was just a news story on the BBC that those responsible for education here are hoping to tempt ex-bankers into teaching.

Is that really what we want our kids to learn? Hubris, greed and an unerring ability to dodge personal repsonsiblity for ones own errors of judgement!

The difference between 2009 and 1929 is going to be the fact that they can now anticipate the avalanche and where and when it will fall so a certain amount of mitigation comes into play that was impossible 80, even 30 years ago. Which is why we are seeing the current moves in the banking realm.

Also social unrest might be good for property speculation but it is not so good for consumerism. I suspect that as with our wars the distant poor will pay the heaviest price and then our own working class. The western middle classes will pay the heaviest price in terms of total $$$ but not the heaviest propotional to their personal wealth. If you follow me.

I'm with you on the having not an iota of sympathy for the financers. And as you point out its the people at the lower end of the food chainer who will bear the biggest brunt.

They have been wreckless and greedy. Their homes should be confiscated and the proceeds of the sale go to government agencies or charities who help the needy and homeless.

I am sick of the garbage that the media spiels out about how tragic it is for them.

God yes, but although politically I'm probably extreme left I don't blame the brokers/bankers as much as I blame the system, or more accurately it's regulation. Sure they're greedy fucks on the whole with no eye on the wider realities, but things have been geared to make them behave like that tbh.

What this does mean, positively, is that this is an end to investment banking, completely as far as I can see. Also, its important to know that the Free Market has never existed really as per its definition. Now, if it had, this shit would probably all happened a good few years earlier. What else doesn't help is that every market has always had completely different rules. Types of deals you could do in London you just wouldn't be allowed to do legally say in NY and vice versa. This is going to seriously effect the strategies each section of the global market tries in order to fix things, and obviously this is going to mean that shit is going to bounce about a lot more and a lot longer than it would if the playing field was level. It's never been level.

The only way out of this it seems is to completely rewrite the rules of the market. The US govt setting up a corporation to absorb all debt is, omg, an incredible circumventing of the terms of a market. I'm not sure it's going to help long term at all, if the market functioned properly it would be allowed to collapse completely. Thats not an option of course, but its theway it should play out according to the rules. Also brokers/bankers are going to royally fuck this new corporation for big and fast money which will prolly cause this whole thing to repeat further down the line.

I'm finding it all fascinating, which is probably shitty of me I know considering the cost to us all. I was an IT bod inside the London Stock Exchange for a while, designing the dealing systems when trading went from the floors to screens (kind of responsible for the first day trading systems in terms of their build, no, I'm not proud of it). I used to say 'Is this legal ?' a lot when discussing things such as share borrowing/lending (which is the root of short selling), I was also freaked a bit by how out of hours/off book trading is acceptable here in London. I'm no economics expert, I really need to get my head round these 'fixes' more, at the moment I can't see how any of them are going to change things.

I think there's a huge problem that the plan to buy up bad debts hasn't and can't yet evaluate.

Injudicious lending has two elements - giving money to people who are at high risk of not paying it back (and the degree to which that has happened can now be evaluated) and giving money against dodgy and over-valued security - and the degree to which that has happened can't be known until you come to attempt to sell the security.

At present, you might think a $200,000 loan against a security originally valued at $200,000 that has subsequently probably reduced in line with housing statistics to a probable $150,000 is $50,000 short. But this pre-supposes the original valuation was correct. In truth, dodgy lending includes major pressure on professional valuers and accountants to be over-optimistic on the value. This ranges from "optimism" to outright fraud. (It works like this - all lending institutions have "panels" of valuers. If a valuer provides a less-than-adequately high valuation guess how many more valuation instructions he gets sent? This applies right across the board and is universally known in the industry yet can never be proved by an outside agency. Panel valuers are dropped merely because of "spelling mistakes" or whatever.

As someone that was employed picking through and identifying thousands of dodgy or fraudulent valuations after the last bubble burst I fear that this will be an enormous factor. And right now, the bail out is being calculated purely on the basis of the supplied valuations, with no-one having the faintest idea of how overstated they might be. The American taxpayer is buying a pig in a poke and might have to shell out another huge sum in a year or two.

When asked about the current financial crisis and the rumours that the UK government are planning to increase regulation of the financial system, the Tory Shadow Chancellor (for overseas folks who may not know, that's the conservative economic spokesman) made this remarkable statement...

This is not a sane world.

(via Chicken Yoghurt blog)

What gets me is the constant mantra capitalism good socialism bad.
Except it appears when all the good capitalists have made some stupid mistakes and there institutions are about to collapse around them.
All off a sudden state intervention in a very socialist kind of way is perfectly acceptable.
Hypocritic bastards!

Monty Python - looking forward and on the ball. Including having the shirt off your back!

http://www.youtube.com/watch?v=GlS8O257Gi0

Just as an add on to this; I read today that the FBI are investigating all the big finance houses that have gone tits up in the US recently - yer AGI's and Lehmans et al....

Creaking sound of a big can of worms being opened?