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.

15 Things You Need to Know About the Panic of 2008

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…
David

2 Comments »

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  1. We all seek that warm feeling of happy understanding, an attempt to explain away the realities of the current economic situation. The possibility that something might truly be afoot that is not a happy outcome, may well be part of that reality. If we look under our beds and see the bogey man, we darn well better say so. It won’t help to try to believe some convoluted explanation about housing prices and mortgages. Something dark is hiding. It’s time to get scared.

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  2. Fair enough. It may even be that the “collateral damage” I mention is closer to the larger issue. I’m no economist.
    But I can suggest that fear never helps. Caution is certainly warranted though. Indeed, I pulled out of the stock market last year as the dark clouds were growing.

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