I just couldn't keep quiet anymore, watching the newscasters
struggle with the Wall St. meltdown, which yes is relevant to Asbury
Park and any community that has to borrow money. So here it is.
OKay, I'm no financial genius, but...
I've been interviewing quants - rocket science level financial
geniuses - for years now about how they create the complex
securities that have enriched a generation of Wall St. elites. And
I've always wondered how anyone could predict what the chain
reaction of a collapse of this hugely complex, global market would
look like? Ironically, a lot of these instruments are bought to
reduce the risk of other investments failing. In credit derivatives,
they may start with a simple credit situation - like a mortgage - a
buyer and debt holder. But the investments that are sliced and
diced, reshuffled and morphed into new complex instruments would be
impossible to identify from the original source.
It's like some older people I've met who are taking 18 meds a day.
What doctor can really monitor the interactions of all those complex
compounds on a living changing entity. Not a bad analogy really.
(Alot of people are going to have more trouble paying for those
meds.)
Now for what drove me to post this on an otherwise Asbury Park
focused site:
The current administration keeps refering to the mortgage industry
as having caused this Wall St. collapse. But the institutions that
offer mortgages - so far - have not been the ones to fall. Yes, WaMu
and a few other mortgage lenders are on the brink. But commercial
banks are doing fine. Sovereign Bank, certainly Bank of America!
aren't in trouble. It's the investment banks that deal in those
structured products that are being bailed out or forced into
marriage.
There's more and I'd like to know what you think. It's at
www.asburyradio.com
Thanks for reading...
Maureen
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