Gilbert Lawrence wrtoe: > It is widely believed that, Derivatives and other risky instruments that >banks and other financial entities > (like brokerage and insurance companies) developed and widely used, to > leverage themselves, that caused > the financial failures. Those practices exposed the financial entities to far > greater risk than giving sub-prime loans.
GL, The cause of the current financial crises is quite simple: Financial regulations that were in place were either removed or not adhered to. As for who is to blame, I will leave that to those who did not heed the warnings and who have now lost their savings and their retirement plans. People will be writing books and articles on who is to blame, for the next 100 years. Luckily, I will not be in that group. My view of the crises is the exact opposite. Lots of financial opportunities have opened. The capitalist system requires that the less efficient get slaughtered by the efficient. The capitalist system also requires the movement of capital from sectors that are not performing to sectors that are. There is a lot of money to be made by those who understand these basics. Lastly, the fact that really scares a lot of people in N. America is that companies which are traded on the stock exchanges are priced/valued on their quarterly performance. In order to meet the profit expectations of the analysts, companies are cutting costs by laying of their workers. The responsible employer would bear the cost of keeping valuable employees thru a down turn. The company that has to meet a quarterly profit, is forced to cut its work force in order to meet the profits promised. A lot of people are going to lose their jobs. In the USA alone, about 600,000 people will lose their jobs this month. Those without savings, will lose their houses a few months after they have lost their jobs. Incredibly, the US govt is trying to convince its citizens that the way to get out of this crises is by spending money. This is insanity. In its purest form. Mervyn1002Lobo __________________________________________________________________ Instant Messaging, free SMS, sharing photos and more... Try the new Yahoo! Canada Messenger at http://ca.beta.messenger.yahoo.com/