What Happened?October 14, 2008 at 10:23 am | Posted in Economoney | 2 Comments
What caused the Panic of 2008?
I saw a video presentation about a year ago by an Economics Prof, showing how some of the financial games being played worked. He had a flow chart covering the board. It was very complex. And some of that complexity was being used to mask risk. Apparently, they had even hired expert mathematicians to work out the possibilities. Here’s an article that explains the jist of what has happened.
It’s worth considering that this is the basics though. There is also a bunch of other dynamics in there, like naked shorts and way over leveraged investments that are cauing collateral damage. Just as the dust will take awhile yet to settle, probabaly doubling the hit, so too are there other aspects that are yet to reveal themselves.
The Dow set records again yesterday in an upwards climb. But I’ve seen charts that predicted this before another fall. We’ll see. The game is still in play…