tag:blogger.com,1999:blog-2850977918787367334.post1944611946759205201..comments2024-02-23T09:18:10.084-08:00Comments on Icono-Curmudgeon-Clast - Loring Wirbel's Rants: Risk-AddictedLoring Wirbelhttp://www.blogger.com/profile/11764834150305763077noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-2850977918787367334.post-61223629903796993842009-02-22T13:53:00.000-08:002009-02-22T13:53:00.000-08:00But Ruth, Ahmedinejad is going to run low on money...But Ruth, Ahmedinejad is going to run low on money sooner than he thinks, as not even OPEC caps on output are bringing prices per barrel back up to the level he was hoping for to fund programs within Iran. Oh, the unpredictable whirl of strange economic storms over the next few months....Loring Wirbelhttps://www.blogger.com/profile/11764834150305763077noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-72924160656787787792009-02-22T10:14:00.000-08:002009-02-22T10:14:00.000-08:00Improved vaccines, is my guessImproved vaccines, is my guessBrian Santohttps://www.blogger.com/profile/08415932044366029481noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-38839396575715199992009-02-22T07:46:00.000-08:002009-02-22T07:46:00.000-08:00I was surprised reading a recent article in the Ne...I was surprised reading a recent article in the <I>New Yorker</I> about Ahmadinejad's desire to put oil money on every kitchen table, thereby pouring money into the economy and creating way too much liquidity, leading to the horrific state of the economy there. Real estate is sky high, and besides of course he closes Iran off from outside trade.<BR/><BR/>This, combined with your post, educated me that too much liquidity is a problem.Ruthhttps://www.blogger.com/profile/14204074161539605133noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-77902205664395113282009-02-21T21:26:00.000-08:002009-02-21T21:26:00.000-08:00Why doesn't the casting of poxes on their houses w...Why doesn't the casting of poxes on their houses work any more?Loring Wirbelhttps://www.blogger.com/profile/11764834150305763077noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-40396558334237091782009-02-21T19:03:00.000-08:002009-02-21T19:03:00.000-08:00Here's a long piece by Michael Lewis that I consid...Here's a long piece by Michael Lewis that I consider the most lucid explanation of what just happened:<BR/><BR/>http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom<BR/><BR/>Lewis backs up Loring'g guess, that the trigger was when people started selling stuff that wasn't there.<BR/><BR/>I got nothing good to say about the financiers I met in NYC in the '80s and '90s. I can't imagine the breed has improved any at all. These are not ethical people we're talking about. I suspect many of them had some idea that what they were selling was value-less, and I can't imagine they cared.Brian Santohttps://www.blogger.com/profile/08415932044366029481noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-54530336366690530702009-02-21T16:14:00.000-08:002009-02-21T16:14:00.000-08:00Oil prices play an indisputable role in EVERYTHING...Oil prices play an indisputable role in EVERYTHING!Loring Wirbelhttps://www.blogger.com/profile/11764834150305763077noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-43716914800379114602009-02-21T15:34:00.000-08:002009-02-21T15:34:00.000-08:00People think that I am crazy, but I really feel th...People think that I am crazy, but I really feel that gas prices played a huge part in this economic nightmare. People, like myself, whose budget did not figure on 50 dollar a tank fill ups for a car with a 12 gallon fuel tank, had to put alot of things on credit to make up the difference. I still have a job and can make all my payments, but I have hurt my future, and I blame it on gas prices.Mikehttps://www.blogger.com/profile/03158978490041796686noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-6516343396407773972009-02-21T11:12:00.000-08:002009-02-21T11:12:00.000-08:00Thanks, Don. This is just my personal guesstimate...Thanks, Don. This is just my personal guesstimate, but I think we were really lucky that it didn't happen 2000-01, because all the elements were there.<BR/><BR/>The key is imaginary assets. That kind of happened in the "South Sea Company" bubble in England in the 1720s. With the Dutch tulip bubble, at least there were tulips. With the South Sea Company, they were trading on things that did not exist.<BR/><BR/>The worst part of the dot-com bubble was not the business plans for dumb Internet companies that would use money to throw parties, but the Internet-infrastructure bubble, where companies would lay fiber based on no demand, and telecom service companies would expand based on "vendor financing" - in other words, Lucent or Nortel would pay the telecom company to install their equipment in their network. Huh? Where was a profit on tangible assets to be made?<BR/><BR/>I started worrying in the early 2000s when Nobel math laureates began going into hedge funds, which were starting with futures contracts and moving into ever-higher layers of abstraction. If you look at mortgage markets, at some point in the subprime tranching, the banks and their investors were realizing profit over <I>nothing at all.</I> As Gertrude Stein said of Oakland, "There's no there there."<BR/><BR/>That's why I think <I>all </I> hedge funds are Ponzi schemes, because they are trading assets that are only imaginary. When that starts happening and you reach a point where the underlying physical assets droops in price, the dangers are magnified a million-fold. One lesson that people should take from this crisis is that if they invest in an asset, it should be something they can kick with their foot and stub their toe. Otherwise, they should run away fast.Loring Wirbelhttps://www.blogger.com/profile/11764834150305763077noreply@blogger.comtag:blogger.com,1999:blog-2850977918787367334.post-20480477600652918482009-02-21T10:30:00.000-08:002009-02-21T10:30:00.000-08:00Wow, I am really digging this post and your links....Wow, I am really digging this post and your links. I feel like I am so ignorant of all of this and this has been very helpful. I think Altman's analysis is really good and thorough.<BR/><BR/>I do have a question that I can't seem to get my head around: What "triggered" this huge downturn to begin with? I can see how people losing jobs or income triggered the real estate mess and how all the bundling of bad mortgages has caused the havoc in the banking industry, but what got this mess spiralling to begin with? <BR/><BR/>Maybe it needs to be your next post, and not an answer in your comments, or maybe you already have it somewhere and can send me there?<BR/><BR/>Always feel smarter when I come here!!!Donhttps://www.blogger.com/profile/16831577769797947426noreply@blogger.com