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Archive for the 'Opinion' Tag
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Financial Crisis: How to say good by in style
One of the big questions and one some of us are getting asked quite a few times these days is it already time to buy back or still better to wait was answered by a Californian hedge fund manager – Andrew Lahde – who made one of the biggest percentage profits of all time and bowed out of the business last Friday with a fierce attack on the “idiots” running big banks who were willing to take the other side of his bets.
He also demonstrated how to say good by in style (when you’ve made your profit).
Below a quote from the letter he sent out and published on the INet (link to full text below)…
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Financial Crisis 101: Why CDS could never work
Many still call or describe CDS (Credit Default Swaps) as a kind of insurance policy against credit risk to limit the risk of the lender. Well that might be so in their dreams or it has been used as a camouflage by the bankers to persuade the investors of the quality – or to mislead them on the lack of it – and suggest that there would be an underlying asset.
And that’s were all the problems start. To issue or construct a CDS there was never a requirement to actually being linked to, i.e. having provided or taken out the credit or having an contractual agreement with these two parties.
Everybody could issue CDS completely unregulated and unlimited. This is of course the reason for the incredible amounts being pushed around and it also provides the reason that – in rare cases CDS might have been an insurance against credit defaults – but in general these papers were only betting slips if certain events might occur most similar to betting on horses or dogs races.
If these instruments would have only been allowed to use for …
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Development Aid: The Investment Banks of the Humanitarian Sector
We had some discussions during the last weeks and a few times we ended up with the same question:
Are there institutions / instruments in the Humanitarian / Non-Profit sector that could be compared to the mess in the banking sector specifically with the Investment banks - a species which in that habitat by today got almost extinct.
And yes we found them.
Created during the last decade on the back of the MDG, many have been installed with targets like deregulation of development funding (yes this did happen – aka budgetary aid aka the thin line along institutionalized corruption), avoidance of regulatory frameworks (e.g. via PPPs), avoidance of multi-national oversight across geo-political blocks (to go around the UN) or to just create the illusion of acting / transparency.
And these organizations share many properties with private sector Investment banks:
Fancy names – most of them answer to names like global, facility, fund, emergency plan. They are almost completely unregulated and their activities are at best opaque…
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Press: Naomi Wolf on S.Palin
Naomi Wolf, who also writes for Huffington Post, has published an interesting opinion piece at AlterNet (link below). If you like her point of view or not, this is definitely worth reading…
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Germany: How to burn 300 Million of Taxpayer’s money in a second
I guess everybody in the banking world around the globe has heard about the Lehman bankruptcy latest this Monday morning, everybody besides Germany’s largest government owned bank – KfW.
In an attempt to win the Darwin award for banks or by taking the name of the bank to literally (KfW – translated: Bank for Reconstruction), they transferred 300 Million Euros to already bankrupt Lehman during Monday. At the same time their government colleagues were closing the German Lehman subsidiary…
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