Credit Material is a public blog full of information regarding Credit, Debt, Loans & Financial Topics.Guardian in a recent report revealed the perpetrators of the global financial crisis. It revealed their names and photos too. The British Guardian newspaper on Monday published a list of people whose work has proved fatal for the world economy. Lies have been told by both policy makers and business sharks.
The publication also listed visionaries who, warned us long before the actual crisis hit our shores. Unfortunately for the all us, these people were not involved in the process of decision-making.
In its famous “black list” Guardian has 25 spots. Almost half of them are filled with the people that have something to do with economic crisis of today. here are some of political and financial heavy weights.
Bark up the wrong tree “guru”
Alan Greenspan, head of the U.S. Federal Reserve( 1987 to 2006), is on the list at number one. The most influential financier has received from fans the world title of “guru”, “oracle” and “maestro”. In the delight of observers led his calmness with which Greenspan has held America through crises of 1987 and 1991, as well as the collapse of IT-industry in 2000 and panic in the markets that followed the September 11, 2001. It was Greenspan in early 2000 pursued a policy of low rates of the Fed, which led to easy money and irresponsible distribution of loans by banks. Moreover, the head of the Fed encouraged mortgage borrowers to take loans with floating rates. When rates inevitably increased after the tightening of fiscal policy in the middle of this decade, the people proved to have nothing to pay sharply increased the cost of credit.
The ex-head of the Fed has made a hand and to create a very unhealthy market derivatives (financial derivatives). Only from 2002 to 2007, its volume has increased five-fold - from a hundred to five hundred trillion dollars. Some experts warned that this number does, in fact, is not secured by the paper could sooner or later lead to an explosion throughout the financial system - not in vain derivatives compared to weapons of mass destruction. Nonetheless, Greenspan defended his offspring with extraordinary perseverance. In 2003, responding to questions from U.S. senators from the banking committee, he said that derivatives - is “extremely useful tool for transferring risk from those who should not take risks, to those who are willing and able to work with them.”
A few months ago, when a crisis has struck the entire financial system, Greenspan acknowledged that he was some what delusional. For example, he agreed that the belief in the omnipotence of the “free market” and its ability to remove all the distortions in the finance and economy was misguided. However, the “maestro” justified by the fact that the crisis, saying that was from those that occur once in a century. ”
The political short-sightedness and greed of the Businessmen
Bill Clinton. If you distribute the blame for the situation in the world economy among policymakers, the 42nd President of the United States get the lion’s share.It was under Clinton began the process of deregulation of financial markets, which eventually made the industry out of control. In 1999 a law was passed to distinguish between ordinary commercial banks and investment banks. Investment banks assumed most of the risks, but also made use of virtually unlimited freedom. The latter is quickly turned into super companies managing trillions of dollars, but by the end of 2008 no independent investment banks on Wall Street remained. The results speak for themselves.
George W. Bush. If the Clinton era of deregulation has just started it, then in the days of the Bush presidency, it reached its climax. Bush did not prevent massive lending to insolvent borrowers. (NINJA - No income, no job applicants). Insolvent borrowers are called “ninjas” (NINJA - No income, no job applicants ( “no income, no work”)). These “Ninja” loans obtained at cost of many billions of dollars, banks granted loans and recorded them as “reliable assets, and regulators have made to pretend that everything is in order.
Gordon Brown. Brown was accused of putting financial interests of London City above the interests of the rest of the country’s economy. Industrial production was high in UK and it was once considered to be the “world’s workshop”. but financial giants took over and financial markets grew at unprecedented pace. At a time when the banking system of the old England is on the verge of collapse, bad words for Mr. Brown are not in shortage.
Geir Haarde. from Iceland. In the past Iceland was a poor country on the edge of Europe, depending on fisheries. But in recent years it suddenly has become a giant pump for pumping capital. Icelanders threw all of their affairs and engaged in financial business. However, when the flow of money dried up, the islanders are left with nothing. The crisis has shaken Iceland much stronger than any other country in the world, and it is evident from a steep reduction in GDP. Prime Minister Haarde and other officials have literally gone around the world - they have been forced in the next few months, knocked at doors of foreign governments and international financial institutions in the hope of saving the loan.
Abbi Cohen. of Goldman Sachs. Former chief investment strategist at Goldman Sachs Bank USA was once considered one of the most influential women in the world. The crisis has destroyed her reputation in just a few months. In recent years, she had forecasted, which could be reduced to the phrase “everything will be fine.” So, exactly one year ago, She forecasted that the index of S & P 500 will complete the year 2008 at 1675 points, while in reality the figure was almost half. No wonder that, with such accuracy of forecasts Cohen was rather quickly removed from that post.
Hank Greenberg. The head of American International Group, 84-year-old “patriarch” of American finance, in his time he turned the company into the world’s largest insurer. But reckless investments and insurance are too dangerous. These risks led AIG to the brink of collapse. In September, only the American state was able to save AIG from bankruptcy via bailout of about 85 billion dollars. While officials from the Fed and U.S. Treasury were running around in distress AIG managers have thrown parties in California and in summer resorts.
Lewis Raneri. The man became a living legend in the financial market, and in American business listed on the same level as Bill Gates and Steve Jobs. He was the author of winged words “mortgage - this is mathematics” and became a pioneer in the industry of mortgage bonds. In mid-2000’s Raneri, however, warned of the approaching mortgage crisis, but it did not prevent his bank Franklin to go bust in November 2008.
Richard Fuld. Lehman Brothers,The world financial crisis gained momentum in mid-September after the collapse of Investment bank Lehman Brothers. Unlike other leading American Financial institutions to recognize the part of his plea in a mess in the financial markets, Richard Fuld made accusations against the state and traders.Lehman Brothers Later at the hearing in the U.S. Congress and Fuld was asked:
“Is it true that, while Lehman Brothers burst itself Fuld earned half a billion dollars.”
“No amount was probably closer to 300 million,” - imperturbably said former top-manager.
The people of the United States of America.
According to the Guardian, the crisis was caused by short-sighted politicians and greedy Bankers. But all this does not diminish the responsibility of ordinary citizens. It is they who took loans, which had no chance to settle. Americans are particularly distinguished by the thrifty and cautious in spending, and now their unbridled passion to ever greater consumption led to a catastrophic situation, not only in the U.S. economy, but also worldwide. Few of the residents left behind in North America and Britain, becoming “credit addicts” in Europe.
Thank you idiots who gave me the opportunity to become rich
Like in every financial crisis, there are always, some people who warn us about the troubles ahead. They are, however, not listened, and are called “bears”(ie, market participants, who play for a fall of market) or even alarmist. However, they are mostly more then just a bunch of losers. For example, the founder of the same hedge fund Andrew Lada managed to increase his fortune in 2008 to 870 per cent. After that, he said that he is going out of business. “Thanks to those idiots who gave me the opportunity to become rich,” - he said. Under the “idiots” in a Lada referring to the leaders of the U.S. financial companies whose shares as a result of the crisis crimpled to multi year minimums.
On the future troubles and warned the larger pieces of global business. The richest of all people in the world Warren Buffett, for example, compared derivatives paper to hell - easy to get in but then you can not get out. In October, Buffett tried to inspire confidence in the market, starting to buy shares of U.S. companies after the quotes were dashed. However, it is unknown whether the 77-year-old investor is really looking to make a profit from these securities, or agreed to support the stock market for patriotic reasons.
Nuriel Rubin. A Professor at New York University for his gloomy predictions got the nickname Dr Doom. However, almost all of his calculations have come true, and now Rubin is one of the most popular and sought economists in the world. He remains pessimistic, predicting total losses for the banks’ 3.6 trillion dollars. At the same time, he was famous for calling President George W. Bush, Minister of Finance Henry Paulson and Federal Reserve head Ben Bernanke “troika of Bolsheviks” who want to transform the U.S. into USSA. United Socialist States of America.”
In addition to the three aforementioned characters, the list of the most astute professionals included the head of an American hedge funds, John Paulson, the analyst Meredith Whitney, former head of the rating agency Standard & Poor’s Kathleen Corbet and investor - billionaire George Soros.
Alas, but decision makers in this period have been completely different people.
People who liked this Post also read
Posted to » Credit
No Comments for this post
No comments yet.
Leave a comment