I'd like to point you at an article here that explains exactly what is so scandalous about the collapse of MF Global and the (seemingly standard) practice of re-hypothecation.
In effect, it means that any assets you own but hold via a bank, may not end up being yours if something happens to that bank.
If you don't want the big boys to get first dibs on your property, you'd better be very sure that the bank you've chosen is solvent, prudently run, and does not indulge in re-hypothecation of customer assets...
Wednesday, 28 December 2011
Wednesday, 14 December 2011
Education is a wonderful thing...
...If you would like a high-level introduction to what's about to happen in Europe (and by a natural consequence of having a global economy, the rest of the world) please view the video located here, where Kyle Bass gives an accurate picture of exactly what 2012 will bring.
In my opinion, the only possible alternative to an EU break-up as posited by Bass, will be a 'second' European currency (ECU2) which can be pegged much lower than the Euro.
Germany will resist this, as it would cause the 'primary' Euro to soar, hurting Germany's exports on which it depends. So what will it be, the devil or the deep blue sea?
In my opinion, the only possible alternative to an EU break-up as posited by Bass, will be a 'second' European currency (ECU2) which can be pegged much lower than the Euro.
Germany will resist this, as it would cause the 'primary' Euro to soar, hurting Germany's exports on which it depends. So what will it be, the devil or the deep blue sea?
Pausing from my revision...
...to highlight this article. It is genuinely as helpful as the majority of articles on the subject that I've seen in the broadsheet and tabloid press of our country.
Why are we so badly informed and unable to pin down the root cause of our current problems? Because the information we would need to make sense of the situation is not being widely disseminated. Why is the information not being disseminated? I don't know. As much as there is a small but growing ground-swell of genuine anger at politicians for protecting a small number of 'haves' at the expense of a large number of 'have-nots', I can't help but feel that journalists are at least equally culpable for not explaining the clear facts of how the financial system operates to the public. The first step to change, is to admit that you have a problem.
Journalists such as Robert Peston (who in the UK is probably the most read financial journalist by some margin) does a great job of dancing around the periphery of what's going on, while somehow managing to never dig into the real meat of what's happening in the world of finance.
After a while, such studied ignorance starts to look about as convincing as James Murdoch's protestations that he:
a) doesn't read his email.
b) managed to go through a meeting the following week on the subject of the email that he didn't read, without getting an inkling that something might be wrong.
Why are we so badly informed and unable to pin down the root cause of our current problems? Because the information we would need to make sense of the situation is not being widely disseminated. Why is the information not being disseminated? I don't know. As much as there is a small but growing ground-swell of genuine anger at politicians for protecting a small number of 'haves' at the expense of a large number of 'have-nots', I can't help but feel that journalists are at least equally culpable for not explaining the clear facts of how the financial system operates to the public. The first step to change, is to admit that you have a problem.
Journalists such as Robert Peston (who in the UK is probably the most read financial journalist by some margin) does a great job of dancing around the periphery of what's going on, while somehow managing to never dig into the real meat of what's happening in the world of finance.
After a while, such studied ignorance starts to look about as convincing as James Murdoch's protestations that he:
a) doesn't read his email.
b) managed to go through a meeting the following week on the subject of the email that he didn't read, without getting an inkling that something might be wrong.
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