Wow, the church stepping in, in a bid to get more bums on pews and to have 'faith'.
This *problem is man-made*. Recessions caused by forces beyond man's control are regrettable; these would include crop blight, bad weather, pandemic disease etc. Yes the insurance industries are under much pressure from a decade of bad weather which may or may not be due to man-made global warming and other factors. The insurer, investment banker, hedge fund manager need to be *spreading their portfolio* and be **generating real wealth** in case it is called upon. The economy is in a mess and there are many *interlinking factors* not being helped by *man-made cock-ups*: under-regulation in some areas, over-regulation in others (say in regards to the price of fuel) or bad foreign policy starting expensive wars. Modelling such a non-linear system is a nightmare. However it is known that non-linear systems far from equilibrium will go into catastrophic behaviour - such as a market crash. The desire to give up understanding such a complicated system and appeal to faith is a childish atavistic cop-out, though tempting, hence the nostrums from the thuggish old left (eat the rich!) and anachronistic church (God will provide, I don't know how, but trust me). Simple measures like that suggested for the mortgage market (have means? have deposit? etc.), reserve banking or not hedging on a hedge helps keep that complicated, multi-variable system more simple in one sector of the economy at least. The complex financial instruments you speak of Ed were caused by the fashion for financial engineering. Mathematics seemed to perform miracles in science so why not mathematical economics http://www.youtube.com/watch?v=wX5II-BJ8hI ? I think we need a Mrs Thatcher type plain and simple grocer's daughter (with a track record in controlling government spending to boot) to practice the common-sense measures of running the family grocery business or dime box saloon. Maybe. I would just hate a world with America in decline against the other power blocks, most of all an America not confident with itself self-flagellating and self loathing as your enemies want it. -----Original Message----- From: Edmund Storms [mailto:[EMAIL PROTECTED] Sent: 25 September 2008 16:11 To: vortex-l@eskimo.com Cc: Edmund Storms Subject: Re: [Vo]:Do do do doo. Do do do doo... For those who have not been following the news and do not have a fixed opinion about the financial problems, let me add a bit of reality. The collapse of the mortgage market was the event that started the collapse but it was not the true cause. The big problem is the derivative market. These are bets between companies about which way various factors such as interest rates or the value of a security will change. For example, I might buy a basket of mortgages and at the same time buy a derivative such that I would be paid a fixed sum if the value of the mortgages dropped below a certain value. Options in the securities world are similar but are more closely regulated. The problem is that the number of these derivatives has increased to a huge amount, as high as 50 trillion depending to who makes the calculation. Because they do not have to be reported, it is impossible to know just how much money is at risk. When the value of mortgages went down, some companies were required to make good on bets that required payment if the value of mortgages would go down. Because of the size of the bet made by some companies, they can't pay and will go into bankruptcy. As a result, the company counting on this payment also can't pay its debts. As a result, a problem has spread throughout the system. The solution requires mortgages be priced higher and money be supplied to allow these bets to be paid without the company having to fold its tent. This is not a simple process and it will invite certain people to gain an advantage. The only issue is how much advantage will be allowed while actually solving the problem. The same people who made the mess are trying to gain all they can while the conservative Republicans and the Democrats are trying to limit the advantage. Of course, McCain is trying to undo the damage his past votes caused while looking like a reformer. Obama is trying to design the bailout so that the pain is more evenly shared. Congress is making its usual attempt to take the easiest path. The outcome will determine the future of many people including some who supported the policies that made the mess. For people who do not understand what is happening to make ignorant suggestions or to think nothing be done is extremely irresponsible. This is like telling people on a sinking ship not to get into a lifeboat because they think the ship can float will being filled with water. Too late, their ignorance is proven wrong. Fortunately, most people have been sense. Ed On Sep 25, 2008, at 4:56 AM, Remi Cornwall wrote: > Theeeeey're baaaaaaack part II. > > http://news.bbc.co.uk/1/hi/uk/7634641.stm > > Yes, yes, yes the megaphone of public office. Most of what they say > is true. > > But guys, that's some fine silk you're wearing and you don't really > need a > cathedral to preach from as Christ did it in the open air. The land > capital > of the Anglicans is legendary. > > Oh and I don't care if two (three, four, whatever) guys, sheep, cat > and dogs > get married in the privacy of their own homes. > > Oh and tell you RC friends to stop fiddling with little boys too. > > Looks like the good ol' feudal day of church and state are back this > time > they've got G.d, the poor, the environment and maybe a little bit of > veggie > fascism thrown in and male bashing too. > > I'm just waiting for these guys to do some miracles, ol' Semtex > Sentamu to > turn that staff into a lightsabre and deflect laser beams and then > 'yoda' > Williams to use the force and levitate things. > > > My advice - don't buy it. > > Let the market correct itself and then some light obvious regulation: > > No more interest only mortgages > More deposits up front with mortgages > More transparency (short selling would work then - move money from > over > inflated businesses to more deserving, wealth redistribution) > Separate high street banks from investment and insurance > > Crisis what bloody crisis? > The public is the tit being milked right or is that the golden goose? > >
