Financial mass destruction

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Joined: Mon 28. Feb 2011, 11:17
PostPosted: Mon 23. May 2011, 19:15
Financial mass destruction

It sounds a bit dramatic, but you can certainly speak of a decline in business manners. The attitude of a nation is critical to the economic success or failure. It seems as if the economic mores have relaxed considerably in the Western world. Diligence, frugality, honesty and loyalty have become foreign words and have the old value lost. Did the young people used to be engineers or doctors, so it is now a goal in their mind: to get rich quick.
In the movie "Wall Street" makes the unscrupulous speculator Gordon Gekko a saying that was seen by many Americans of Yuppiegeneration a motto: "". Greet is Good "(greed is good) .It should be known that Gordon Gekko in fact is the villain in the film. Be and act as him.
In a boom do people and institutions quickly get money that would normally never engage in risky transactions themselves. But in such times, they develop self confidence, which really is not justified and start building daring and complex structures. In a long boom experienced by many people, how many other seemingly effortlessly from an undeserved win money. Increasingly complex financial arrangements are risky and often they prove to be successful there as well. The global debt would never be able to run up to its present dimensions, when the financial industry would have invented something, which allowed the company to accelerate in the last 25 years, the debt machine again. Securitiziation the "derived from security = security) or securitization. This is far the creation of tradable securities on debt.
If for example a regional mortgage bank earlier granted, she gave money to the borrower, the amount had changed by the property gesichert.Securitization this could System.Nun mortgage loans are bundled and placed in the cash flows (interest and repayment) by being converted into a loan . This meant that the Creditwheel again be moved and are supplied with new momentum.
As early as 1994 lost Orange County, a county in Southern California, more than 1.7 billion dollars in speculation in financial derivatives, and was therefore insolvent. Just as this happened to many county and all cities that are actually insolvent and be based provisionally.
Warren Buffett called the speculative excesses in the stock markets as financial Massblastweapons.As there would be:
-Financial derivatives
-Private Equity

Both types of speculation are each described in separate chapters.

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