Echoes of 1929?
Intellectual Conservative
by Thomas E. Brewton
03/06/07
A great many economic conditions, as well as the structure of the financial markets, are different from those of the 1920s. Not all of the differences, however, are reassuring. Recent news reports tell us that banks’ reserves against risky loans such as sub-prime mortgages are at low points. Money is pouring into hedge funds and private equity groups. The massive prevalence of derivative securities in portfolios of pension funds, insurance companies, and commercial banks is worrisome. In 1998, the cratering of Greenwich’s Long Term Capital Management, because of unanticipated consequences of its derivatives investments, threatened to sink the international financial markets. The first broad parallel to the 1920s is the excessive creation of bank credit by the Federal Reserve...
http://www.intellectualconservative.com/2007/03/05/echoes-of-1929/
Informant: Thomas L. Knapp
by Thomas E. Brewton
03/06/07
A great many economic conditions, as well as the structure of the financial markets, are different from those of the 1920s. Not all of the differences, however, are reassuring. Recent news reports tell us that banks’ reserves against risky loans such as sub-prime mortgages are at low points. Money is pouring into hedge funds and private equity groups. The massive prevalence of derivative securities in portfolios of pension funds, insurance companies, and commercial banks is worrisome. In 1998, the cratering of Greenwich’s Long Term Capital Management, because of unanticipated consequences of its derivatives investments, threatened to sink the international financial markets. The first broad parallel to the 1920s is the excessive creation of bank credit by the Federal Reserve...
http://www.intellectualconservative.com/2007/03/05/echoes-of-1929/
Informant: Thomas L. Knapp
rudkla - 6. Mär, 15:49
