Later On

A blog written for those whose interests more or less match mine.

Billmon gives inside view of the financial crisis

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Well worth reading. Billmon is always worth reading, and this time he has an inside view. Read it. It begins:

The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to ensure that as few as possible escaped the common misfortune.

John Kenneth Galbraith
The Great Crash: 1929

I apologize for being out of radio contact of late — I work on the financial industry and the past few weeks have been, ah, eventful, which is to say, catastrophic.

I won’t bore you with the bloody details; others, such as bonddad, have already sliced open the corpse and described the basic anatomy of the crisis, which is depressingly identical to the aftermath of every other speculative bubble since Adam and Eve tried playing the apple futures market.

Bells and whistles aside (such as the fungal growth of a $10 trillion global over-the-counter credit derivatives market, or Wall Street’s blind faith in its own ability to transubstantiate subprime mortgages into AAA-rated, investment-grade paper) the only things remarkable about this bubble were how long it lasted and the scale of the recklessness.

Some mistakes look even dumber in hindsight than they did at the time: Like …

Continue reading.

Written by Leisureguy

23 September 2008 at 10:56 am

Posted in Daily life

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