George, Banks are always fighting the last war. I do not think that LTCM was a full enough lobotomy for derivatives not to be a concern. But their next disaster could be in an entirely different field. I am thinking massive credit card non-payment. That seems unlikely, as the Law of Large Numbers works in their favor, but, then, I see the amount of credit I have on the plastic and I wonder. If I wanted to, and I don't, I could charge several times my current salary. True, my net worth backs it up, but if I were all in stocks and there was a decline, who knows?
They say that when a bank builds a big skyscraper, watch out. My understanding was that Citigroup got rid of its building in NYC, though I don't know if they simply bought another or what. Shreveport is an interesting place. The fella I'm training with is a Louisianan, though from Alexandria. I've heard more Louisiana lore lately than I thought possible. And I know the name of every lug on the LSU football team. <g> |
