Friday, December 5, 2008

The other!!!! Which is peard hunky dory?

Srivatsa Krishna writes in ET

  • …the finest financial brains and watched over by who one thought were prudent and experienced regulators, suddenly sputter to a dead halt?  
  • …..a karmic coincidence, one of the key proponents of it later in the SEC is one of the current bosses of the American treasury! 
  • …..fancy mathematics PhDs hired by various Wall Street giants created more and more sophisticated models to try and justify lending to those who were inherently not creditworthy, it started a race to the bottom. Evidence of this is the fact that in 2002 on the average, private equity firms were on a 4x leverage multiple which grew dramatically to almost 6.5x in 2008!.... 
  • …..the last week of September, 40 billion of seven-day treasury bills were sold, at a yield of 1/20th of 1%! 
  • At the time of the Great Depression the total credit market debt/US GDP ratio stood at about 270% whereas today it’s at about 350%! Over the past 10 decades of the previous century this ratio has stood at 200% or below. 
  • …where anyone could walk in and make a bet on any stock, without actually purchasing anything! This was the precursor to the Great Depression of 1907. 
  • ….the size of the credit default swaps market was $100 billion. It stands at a staggering $60 trillion in 2008!  

Only the reader can hunch if (s) he have been reading all kind of opinions on the current financial crisis.

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