"Some day, some time, the history will be written about how close we came to the edge of a total meltdown."
Like I said, I'm reading "House of Cards", about the collapse of Bear Stearns.
I'm just a couple of chapters in, and I already know they were operating while leveraged 33/1, and had to borrow $50 to $75 billion "overnight" some days to make their nut - as did (does?) EVERY big investment bank. They'd borrow it from other IB's, groups of hedge funds or all or them combined. ALL the big IB's operate this way, have been for years and, as far as I know, still do. Then, GS started doubting Bear in particular, because of it's exposure to subprime mortgages, and didn't want to loan it money overnight..
I guess I'm a traditional fiscal "conservative", but I'm not comfortable unless my assets outweigh my liabilities. It's especially darkly hilarious the the "fiscally responsible" (R)'s are the one's who mainly encouraged and grew this hands-off, shadow banking system for rich folks who "knew the game" that failed.. |
