What did they discuss? The design of a new financial product: securities based upon subprime mortgages. As reported at Bloomberg, they thought they had figured something out...
The new standardized contracts they created would allow firms to protect themselves from the risks of subprime mortgages, enable speculators to bet against the U.S. housing market, and help meet demand from institutional investors for the high yields of loans to homeowners with poor credit.
I suspect all those people are still pretty well off, even though they may have brought about one of the biggest financial catastophes of all time. I guess that remains to be seen, but it is looking pretty bad right now.
The tools also magnified losses so much that a small number of defaulting subprime borrowers could devastate securities held by banks and pension funds globally, freeze corporate lending, and bring the world's credit markets to a standstill.
Does anyone still believe that a free-market economy is the way to go?
Comments
Does anyone still believe that a free-market economy is the way to go?
I like the free market economy, but I think in cases where so much power is given to so few it has to be monitored and regulated. So, did I just blow the word free out of it? LOL!
Dave Briggs :~)
Posted by: Dave Briggs | December 18, 2007 11:28 AM
Lest we forget, the reason Osama chose to persue this strategy is because he was defeated domestically. He took them directly on and he got exiled. And for the past 5 years, this little, marginal, defeated guy is playing the most powerful nation in the world...
Posted by: Adsl | April 29, 2008 2:57 AM
The tools also magnified losses so much that a small number of defaulting subprime borrowers could devastate securities held by banks and pension funds globally, freeze corporate lending, and bring the world's credit markets to a standstill.
Posted by: Gazete Magazin | April 29, 2008 2:58 AM