Ilargi: As you may have gathered by now, I read a lot. A whole lot. Today is no exception, as you can see from the amount of material below. I like to see what everyone is saying, especially when opinions differ a lot. Still, I knew beforehand what I thought, and what I would write about. I’ve known this one since I first started writing about finance a few years ago.
The credit - or financial- crisis we are drowning in today was caused by one thing: bankers and other financial institutions treated their deposits and other solid assets as items that could be put on casino tables as collateral for bets. Anything they could claim ownership of was laid out right there in front of the dealer, and the dealer accepted it. This was possible because regulators, and governments in general, loosened definitions of ownership (is that really yours, sir? ), and allowed their fat fingered bankers to bet 10-20-100 more than they actually showed the dealer, who in turn assumed the government would be good for it.
This part of the casino has now been closed; the tables are empty, the chips are missing, and Mr. Luciano is out looking for kneecaps.
Read on...
Ilargi's post follows Peacenik's rant about the banks yesterday. The banks gambled away the world's wealth and now the bankrupt system is beyond salvation. Chrsyler just announced it is shutting down all its operations for a month. Does anyone really believe that Chrysler is going to re-open. Just for old time's sake Peacenik will visit a few car dealerships and take some pictures. Peacenik is documenting history, ancient history. Motorola just announced it is freezing salaries and pensions. The dominos begin to fall. The consumer society is dead. Peacenik's sad advice is to save your cash and buy food and water only. And beer. Peacenik got Peacenik's first Google Alert about groceries this morning. Stay tuned, the early warning system is operational.
