Yeah some good points mentioned here!
Who is the winner?
'The money is not disappeared, someone else has it.'(Philippe Baron Rothschild)
Actually some guys raised their boni with buying critical funds. Not unusual, but they bought with money they did not have actually - yes 'virtual money'.
Like playing roulette with chips they did not pay...
The funds did not have real countervalue. But as long as everybody buys, there's always enough money flow into the funds....
again as you might guess it is 'virtual money' nobody has ever earned or any countervalue....
Kinda dangerous practise, but interestingly totally legal....
Now when the money flow stops the highly rated funds are worthless within a day- crash.
Is it dangerous? Sure. Is it totally critical? NO!
Interestingly this happens like three times a week in the commodities futures market (top value stocks becoming totally worthless)
So one might ask, what the problem actually is.
As crazy as it sounds until here, the real problem is that politics and economics did not react upon warning voices from the real business experts, the signs of the crash could have been seen since 2004.
But nobody wanted...
And with proper decisions it could have been dealt with. But simply nobody did.
Politics trusted more in the self-regulation of a market that is quarter bonus oriented, where no manager is accountable because he takes a fat golden handshake and leaves his position right before the outcome of his actions become visible....or just stays in position and insists on the correctness of his decisions and asks his country to pay the bill for the gamble loss...and (you might guess) HIS QUARTERLY BONUS.
And the politicians pay. Even the boni. Sometimes even without the slightest monetary sanction.
(Just an actually discussed issue in my home state Schleswig-Holstein, where a bank manager got 2.670.000 Euros for the actual year thru improper channels despite country and state official decision to sanction the income to poor 500.000 Euros.)
(Well, for gods sake, at least the bill is not payed from politicians wages, but from ours...if we did not loose the job in the meantime. So it's not too hard a decision, right?)
Well, this is not the way it's handled at the commodities futures market...
Why are our politicians that uninformed, misleaded and incompetent to recognize simple analogies, one might ask?
When everything already went wrong, how could it be that they just do 'something' instead of a sincere analysis and proper action in analogy of things that are known to work for ages?
Sorry for the rant. But makes me feeling upset every time I think about it.
Maybe the warning people were underrepresented on the tv screen or something...
IMHO it's not only a US originated ssue. Or a US/China/EU/SouthAsia issue. It's a global systems issue that politics has completely failed to deal with.
Kind regards,
Martin
BTW in the roman empire a senator had to show up 40 yrs of continuous widespread education and personal developement as well as practial political competence.
I guess we are a little bit falling behind nowadays...