The economic downturn seems to have hit this group too! It is
certainly true in my own case as my UK income has plunged by over 30%
in a year and 16% since early Dec. This does have quite a dramatic
effect on window shopping and my ebay activity has shriveled also.
Have prices in the UK changed or is it that disposable cash is in
The good side is that it has guided my activities into repair /
redesign for which I have the parts, it may even drive me to put more
effort into designing a better TOT detector!
you're selling your software to the wrong people
people who bought your software didn't use it.
Obviously, someone didn't consider the credit risk implied in buying
those mortgage-backed securities before the credit crunch.
British OO, American and Australian HO, and DCC in the garden
Just a minute! 'Credit risk software' - how does that work, pray? It seems
as likely that you could have sorted out the 'good from the 'bad' as you
might be able to predict the winning lottery number. It is this kind of
computer aided nonsense that has got us into this mess. This software will
only work if people tell the *truth* about their assets and income and this
clearly was not happening with the ninjna mortgages that banks were dishing
out. It didn't even work with banks which got AAA ratings until the day the
s**t hit the fan. I would doubt very much whether your outfit will profit in
the downturn anyway as no one is giving credit to even good risks.
On Sat, 17 Jan 2009 15:12:50 -0000, "Alistair Wright"
Not really. What went wrong, for the most part, is that people did
not assess the risk properly, especially they had not properly
assessed their exposure to risk derivatives. I think a lot of
derivatives will vanish as a result of the recent problems, and good
riddance to them.
And a good bit of the toxic debt came from lending money to people
called Billy-Bob in the hope that when they default you can
repossess the assets and sell them at a profit - something which was
torpedoed by the completely unprecedented event of property prices
dropping after a long period of stratospheric growth. Nobody could
possibly have predicted that. (Yes, that was sarcasm).
"To every complex problem there is a solution which is
Thats the detail behind it but to me its like every other fashionable
financial rollercoaster - south sea bubble, railwaymania, tulips, dotcom....
Someone made some money, can start off reasonable but the next person does
it cos heard someone made some money and next/next person does it....
There comes a point where its just a pyramid scheme and either people darent
get off, dont want to get off or just pretend its fine - not understanding
is pretending its fine.
They say to themselves everyone else is doing it so it must be ok, but that
translates for the individual 'if theyre making lots of money then I want
some' or if its an institution then its 'if it goes pear shaped then we can
point to everyone else made same mistake'.
How many bankers etc will apologise, hand back significant quantities of
prevoius bonus's and resign on a reduced payout/pension.
For what it's worth, my neighbour who is a venerable French paysan of
80+ observed that there is only so much money in the world so if one
person gets more then someone else must get less. This is the
fundamental financial truth and when everyone is getting rich
simultaneously then at least half of them are kidding themselves.
Bankers and other financial wizards have spent the past decade playing
the money go-round where one cheque circulates between several
accounts and the difference is called credit or maybe even deferred
gratification. For the individual it is illegal, for the bankers it
is called business. I can only hope that my pagan prayers result in
something aweful happening to most of them!
On Sat, 17 Jan 2009 13:28:40 -0800, Sailor wrote:
I one were to write a banks business systems out and present it to a bank
(without them realising, somehow) as a proposed business plan, they'd
laugh you out of town. Or ring the Police.
Absolutely. And in the City, a lot of people knew it was a house of
cards - anything that looks too good to be true generally is.
When others are making huge sums it is hard to be the one to point
out that the emperor is bollock naked. I seem to recall Lloyds TSB
being marked down by a lot of analysts for not buying into sub-prime
lending - they came out of it looking very smart, of course.
In the end, what part of "sub-prime" were they having trouble
understanding? Seems to me that you can't make a good credit risk by
combining multiple bad credit risks, and the first thing you have to
look at with any consolidated debt derivative is: are the individual
debts subject to different risks, or similar risks? The fact that
most of the toxic debt comes from combining large numbers of debts
all exposed to the same source of default risk, never did look like
anything other than a stupid idea. The first warnings I read of the
dangers of this were in mid 2006, I think.
I am not a financier so I had no idea how big the problem was or how
many institutions would be caught up, but as an IT nerd with at
least some understanding of the things going on in the buildings
around me (in the City and Canary Wharf) I was always puzzled that
subprime lending was in some way hot or glamorous. As a friend of
mine pointed out, there are people who specialise in lending to poor
risks, and they usually get paid, but only because they have large
men with knuckle dusters to collect the money. Take away the large
men and all you get is bad credit risks, which banks don't normally
lend to for damned good reason.
None of them. I think we should bomb a few pacific islands just to
show them we care, but as usual the rich will stay rich, the poor
will stay poor and the middle classes will bear the brunt.
"To every complex problem there is a solution which is
Is that the right way round, I always remember my father singing it :-
It's the rich what gets the pleasure
It's the poor what gets the blame
It's the same the whole world over
Ain't it just a bleeding shame?
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