Archive for November 14th, 2011

I have on hand a report where 52 economists have put the chances of falling back into a recession in the next year at one in four. The same Wall Street Journal had come with a one in three chance foreseen by the same group in September.
America is biting the bullet and hoping the nightmare would go away. The Great Recession officially ended in June 2009, but the bits and pieces of the Great Meltdown of 2008 still reverberate. Now all we need to brace for is Europe’s debt crisis. It is like the riptide after the high tide of consumer spending for goods we could not afford,- and listening to Alan J Greenspan as though he were an oracle, and finding after the waves broke that the ground was cut off from beneath, he was mistaken.
Now while in America politically divided house harp over the same old charges at one another veterans are suffering, man on the street is suffering and the home industries are gathering dust. I suspect American Banking is one grey area where troubles brew come high tide or low tide.
As a layman I do not trust banks. Especially when they crow of their expertise. American bankers are like crows with degrees but technocrats with so much power in their hands often behave like cuckoos. Remember how clever John Devaney sounded when he bought up risky loans? Hedge funds played an important role in his life. By buying up mortgage loans, Devaney and other hedge-fund managers made it profitable for lenders to make questionable loans and then sell them off. Hedge funds were more than willing to swallow the risk in exchange for the promise of fat returns. Devaney wasn’t just a big buyer of mortgage bonds — he had his own $600 million fund devoted to buying risky loans — he was one of its cheerleaders. He was also a wizard , maestro jumping through hoops, only that there weren’t any. In early 2007, talking about option ARM mortgages, he told Money, “The consumer has to be an idiot to take on one of those loans, but it has been one of our best-performing investments.” From crow to cuckoo is the art making the dollar shrink,- and whichever way you look it cannot do you any good.(ack:Time magazine/John Devaney)

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