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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: KLP who wrote (269088)	9/17/2008 8:54:17 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 793916

The economist son thinks there will be books written about these times and read as textbooks for the next hundred years. He also thinks it is worse than we've been led to believe so far..... Oh definitely.. I'm sure they're being written as we speak. As for "worse"? It can be, if the appropriate measures are not taken to buffer the de-leveraging. We all know that fear is a greater motivator than greed which is why the Naked Short Selling has been so successful. The new financial system is going to to either need to be less complex, or more sophisticated with regard to clearing, and appraising the value of, financial instruments. As I understand it, this CDS issue represented a sword of damocles that has been hovering over the markets for years now. I think there will be 3 results out of AIG. There is going to be a period of massive deleveraging as those CDS's get unwound. Rival insurance companies are likely to benefit as AIG goes into run-off and no longer attracts new business. And AIG more profitable components will be auctioned off and sold to folks like Buffett who is probably just licking his chops over the opportunities being presented to him. Hawk