Thread: Recession
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Old 10-30-2009, 12:29 PM
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"Economic turn around" my sweet ass. We haven't caught up to where we were when things went sour. More and more people I know are getting laid off, local businesses are running shorter hours, manufacturing is still down, a 3.5% GDP rise was based on a prior quarter and wasn't in comparison to the GDP at the time of the recession and all this "We are making changes and have seen significant gains in the economy." talk is plain B.S.

We may have seen the bottom of this "downturn" (why pull punches? It's a freakin' recession!) with the housing market starting to stabilize but we won't see a return to a prosperous economy for some time.

Now who should be shot, hung, drawn & quartered for this? Well, we have "toxic assets" created by the banks and sleazy fly by night lending institutions who gave anyone any amount they needed to buy a house they couldn't afford. We have off the books "derivatives" which weren't regulated and were the key element to the crash.

If you aren't familiar with "derivatives", basically derivatives are financial securities whose value is derived from another "underlying" financial security. Options, futures, swaps, swaptions, structured notes are all examples of derivative securities. Derivatives can be used hedging, protecting against financial risk, or can be used to speculate on the movement of commodity or security prices, interest rates or the levels of financial indices. The valuation of derivatives makes use of the statistical mathematics of uncertainty, which is very complex.

So, these financial wizards were basically speculating and hedging on projected values of someone else's derivatives, whose derivatives were based on projected values of someone else's derivatives whose derivatives were....bleah...bleah...bleah...

They got creative. They got greedy. We got screwed.
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