That Crisis
So the news from Lehman Brothers is a bit of a shocker, especially as I was reading the article saying that they were going to declare bankruptcy, and by the time I clicked back to the BBC News front page they *had* declared it. That’s a lot of money they lost, and not a great deal of time in which they lost it.
That of course follows last week’s takeover of Fannie Mae and Freddie Mac by the US government, who have decided their stability is too important to the entire world’s financial stability to risk them going under. No shit, Sherlock. When I watched the news about it on the day it was announced, the only thing I could think was “who in the world thought it was a sensible idea to have £3trillion of business locked up in a single interlinked pair of businesses?” Surely someone somewhere should have spotted that the whole idea is a crazy one even at the best of times?
September 15th, 2008 at 8:09 pm
Sadly it was all wrapped up in yet another bubble in which everyone* claims that the world is different, and now everyone is realising that this is not the case. If something seems too good to be true, it probably is. In this case, absurdly cheap debt that could be easily sold on with little to no consequence …
*admittedly not everyone, cf warren buffet, but enough to fuck it up unless your careful.
September 16th, 2008 at 11:34 pm
Oh dear, I don’t understand it at all. Not at all. I’m seriously considering the ’sock under the mattress’ form of investment at this stage!
I don’t even know what £3 trillion IS in the grand scheme of things. I’d usually hazard a guess at ‘quite a lot’, but I’m fairly sure that military budgets tend to be quite obscene, so there must presumably be several more trillions out there somewhere.