Originally Posted by Nick
It is a sad state of affairs when people think that doctors just learn stuff and regurgitate it. Its all about the application of knowledge and a constant updating of your knowledge. Medicine, at present, is just as much an art as a science- all of the tests and the scans in the world will give you an answer but you need to target them. Anyways this is well off topic and I am just doing this to stand up fr my profession!
Not around too often!
Hang on, I'm not having a go at GPs!
I like GPs. My GP is a bit of a horn dog, though I think she's starting to suspect I don't really have recurring groin strain...
I know you were not but I felt I had to add a little extra to the arguement! Its more interesting than the spreadsheets I have in front of me!
Not around too often!
Bloody middle managers!I know you were not but I felt I had to add a little extra to the arguement! Its more interesting than the spreadsheets I have in front of me!
Well that's an oversimplification. I didn't set out to accuse GPs of being overpaid (in fact it wasn't me who mentioned them first), and compared to a lot of people earning similar amounts of money in other professions they are paragons of usefulness to society. What it comes down to is that as someone who is a moderate socialist, I cannot see why any worker is worth six or seven times as much as another when they're working similar hours.
Well if they're dissatisfied with their union they should vote out the people running it and elect someone competent. And if that means standing for election yourself, then do it or don't complain. I think that's a fair enough view?And if they did deserve or want more money, they have a crappy union and that's their fault, because they made that choice and therefore they have no right to moan.
I have. It's a free market, fair enough. Except it isn't because when it starts to fall the government rubbishrubbishrubbishrubbishrubbishs a load of my taxes trying (unsuccessfully thus far) to prop up prices.So stop whinging about how you can't get on the property ladder
Being good at learning academic subjects is not the same as being good at doing a lucrative job. In any case, my GCSE and A-Level grades are above average, but I don't have a degree- I flunked out because I simply couldn't do it. I have a very poor attention span- it wasn't laziness, I was simply incapable of learning what I needed to.and the disparity in pay between the boardroom and the shopfloor. You did ok at school, your grades are, as you said yourself, well above average. So it's purely the choices you made that have gotten you to where you are now.
I am pretty happy now, as it happens. Through working hard and conscientiously I've got a job that pays me well enough to do pretty much all I want in life.Whether you're happy with your lot in life so far is no concern of mine, I have no sympathy... you knew what you were doing when you did it and your own lack of foresight is your own fault, so stop moaning.
I'll be able to save plenty over the next few years, don't you worry.That you can't afford the mortgage to be able to gazunder somone isn't my problem... you chose the path that put you there. That you have to work overtime to earn 35-37k is no-ones fault but your own, you chose that job. That 35-37k isn't enough to allow you to save isn't my problem, you chose to rent where you do and pay the high cost of living there.
Well, I suppose you're right. These people were most likely born greedy and/or financially unsophisitated, so I guess it's probably not their fault.Which isn't me at all... and I did think that it wasn't you either...
Explain to me how you're helping the economy develop again? Because it seems to me that you're investing with a view to making money simply from the movement of financial markets, rather than investing with a view to supporting good companies that add value to the economy as a whole.
I'm not saying that at all, on the contrary I realise that it is a difficult job that is far beyond the reach of most people, myself included. I would have to take a LOT of ritalin to be able to get a maths or computing degree, even if I was capable of doing it at all, which I doubt.It sounds like you simply say oh its easy job, they do nothing. Well then why not go do it yourself? Do you not want shed loads of cash?
Yeah right. A problem this large cannot be caused by an irresponsible minority, at least not without the rest of the banking sector turning a blind eye. The failures have been systemic. It's not rocket science to see that a system that involves piling up more and more debt at ever increasing leverage ratios is not a money making system that can continue in perpetuity- or even for a long time. It was always going to end in tears. I knew about two years ago that the clock was ticking, it's just a shame that I couldn't have timed the inevitable collapse with more precision, else I'd have made a killingThe same goes with plenty of the other institutes, there was this sudden black swan where perfectly good credit is undervalued. Much like the share price of Barcap atm is considered by some industry analysts to be undervalued (this is NOT investment advice, i'm not qualified to give such advice, if i do, don't listen too it). The toxic CDS stuff has poisoned the well, and the blame for that can be largerly put onto complacency with a large portion of the ratings agency, an A rating means nothing right now. People where conning them with dodgy bond backing techniques.
Yes, and this has been hastened by short selling and the financial derivates (put options, for example) that you claim contribute to a stable and efficient market.So the problem was a frankly small segment (Eqd outnumbered CD by about 7 to 1 at my last place, but where responsible for losses of half the profit of Eqd!) of the banking industry has brought it to its knees, this has snowballed into a race to the bottom.
They never seemed prudent to me.Many what seamed prudent decisions are now costly because they didn't take into account such end of the markets as we know it.
Oh right, they should have a gold star, since they've only screwed up a little bit.And that fundamentally is the key, people will always screw up, there not infallible, but the fact for many that they've only screwed up so little is actually quite impressive when you comprehend whats going on.
GS are the exception IMO, I doubt any other bank is in the same state of health. Which is good, as far as I'm concerned, because in the last few years, banks have gone from making healthy profits by investing in good companies that add value, to making obscene profits through a vast and enormously reckless credit Ponzi Scheme. In doing so they've actually made the vast majority of working people poorer, by vastly pumping up the cost of housing, and by pumping up the money supply so that prices inflate.Oh and to get an idea of how undervalued the whole banking industry is (this causes the nasty snowball that makes things worse than they are, much the same way the governments NRK announcement caused ALL their funding to dry up) look at Buffett's buy of GS.
What would I be able to get a job doing? I've no degree, and my C at A-Level Maths is not going to be good enough to cut it in any kind of technical role.Instead of saying about how you'd feel little sympathy for me if i get donut'd, why not take some risk and apply for a city job? You would get 37.5k starting at most places so you wouldn't have to take a up front cut. And join the next bubble
Not really, no. Compare the tone of the last article with the one I posted. There's a pretty big difference. Not a single personal example, for a start.
Indeed, you didn't. I mentioned them first .... as an example of how a pair of normal, hard-working but decently paid people (such as professionals) could afford enough to put a deposit on and get a mortgage on a £600k property.
You said ....
.... as support for the view that they deserve no sympathy for getting done over by gazundering. I still don't see why someone getting kippered by a gazunderer is so undeserving of sympathy for having got kippered, just because they can afford a £600k flat or house.
I merely pointed out that 2 isn't so unlikely, and nor does a £600k property exactly suggested fabulous wealth, especially when it may well have had a substantial mortgage on it .... without being "moronically" mortgaged "to the hilt".
If it had been a £6 million house, then maybe I could see where a lack of sympathy comes in because that IS real money these days, but a £600k house is nothing special, especially in many areas of London, and is quite within the grasp of many sorts of reasonably well-paid people.
Who mentioned GPs first isn't really the point. What irked me, and I suspect irked a lot of people, is the smug, gloating tone of your opening post ....
Spoiled little rich kids, eh? That was the point of mentioning GPs. You seem to be revelling in the fact they they got kippered, because you classify them as "Spoiled little rich kids", which is why people have suggested that it looks like a case of envy.Oh the poor souls. In their 20s, own a flat that, gazundering or not, is worth north of £500k, and still think they're being hard done by?
Here's a wake up call, you spoiled little rich kids: no-one has an ounce of sympathy for you.
Read the whole article, it's genuinely hilarious.
I think you'll find that far from "no-one" having any sympathy, you're in the minority in your apparent amusement at someone else's misfortune is getting done over like this.
Thanks for that - this is now my word of the day.
Its basically that simple, we find companies that are worth more than currently perceived and support them. You don't get more supporting that pumping cash in.
So how does that happen via a derivative when we buy an option from Big Bank A? Well big bank A will have to then look at reducing its risk, and will buy some underlying equities.
Its a bit removed, but like a butterfly on the otherside of the world, big things happen.
dude i got a 'd' at a-level maths, and a c at further...........I'm not saying that at all, on the contrary I realise that it is a difficult job that is far beyond the reach of most people, myself included. I would have to take a LOT of ritalin to be able to get a maths or computing degree, even if I was capable of doing it at all, which I doubt.
If my pay was only double that of a lecturer i'd be in some CS department teaching freakish alternative programming paradigms. This is where the retention problem comes from. Half the people in my old place where constantly saying "i'm going to stick this in next year, soon as the mortgage is paid off". Very few did, the majority just got bigger and bigger pay rises until greed kept them at work. Its not an easy or relaxing job, all the traders on my desk bar 1 are baldies, (where as only 1 person in say infrastructure IT is). Also in over 2 years of this world i've only ever seen 1 person pack it in, to drive tubes.Yes, the vast majority of the CDO/CDS owned by LB have been cherry picked by the buyers. It was only a small percentage that where toxic. Think of it as the classic tulip speculation bubble, a new industry comes along, people get more and more excited about it, a value thats un-realistic gets assumed to be standard.Yeah right. A problem this large cannot be caused by an irresponsible minority, at least not without the rest of the banking sector turning a blind eye. The failures have been systemic. It's not rocket science to see that a system that involves piling up more and more debt at ever increasing leverage ratios is not a money making system that can continue in perpetuity- or even for a long time. It was always going to end in tears. I knew about two years ago that the clock was ticking, it's just a shame that I couldn't have timed the inevitable collapse with more precision, else I'd have made a killing
The thing is many of these CDO/CDSs generally are undervalued and there are some people who are making a 'slow buck' buying them, the problem is that because trust has broken down, people are assuming its a Lemon Market so all the good stuff, gets priced as bad stuff, because its so hard to tell. This is the thing no one saw coming the breakdown of trust. Plenty of people had been short in US property for a long time, plenty have lost money doing so.
But EVERYONE lost in credit, when the trust collapsed.Yes, and this has been hastened by short selling and the financial derivates (put options, for example) that you claim contribute to a stable and efficient market.Short selling is GOOD, its NECESSARY and its only utter rubbishrubbishrubbishrubbish brownites that think its a bad thing (also the same people that think a ban on it works, it doesn't this basket $10,000,000 options put on GS, $1 option put on VOD LN is legal.) without shorting a bubble happens. You've always said property was overpriced, if you'd put your money where your mouth was and bought some puts on a property index, you might of saved the world from this.
but you don't understand what they are? Lending money is a good idea and the vast majority of it was properly lent........They never seemed prudent to me.Yup, your a manager, when someone turns up for work hungover because they screwed up and had a little too much to drink last night? I bet you don't cause a major scene enless they persistantly do it? In this case its a much, much easyer almost more forgiveable sin to screw up. In EqD i've seen plenty of traders who are up a lot, make a couple of really stupid posistions, so stupid tech boy 'ere knows their stupid.Oh right, they should have a gold star, since they've only screwed up a little bit.
Do it once, your ok, do it twice you get a P45!Right, there are plenty of banks who are in the same health, look at the europian ones, heck even barcap.GS are the exception IMO, I doubt any other bank is in the same state of health. Which is good, as far as I'm concerned, because in the last few years, banks have gone from making healthy profits by investing in good companies that add value, to making obscene profits through a vast and enormously reckless credit Ponzi Scheme. In doing so they've actually made the vast majority of working people poorer, by vastly pumping up the cost of housing, and by pumping up the money supply so that prices inflate.One's from a news source, the other from the daily fail, who's readers can only understand things if its personal. (you know my views on the emotive ness of the papers, you've got the gardian telling us about hte plight of dying puppies, the daily mail telling us how mr john's puppy died, and the sun showing pictures.Not really, no. Compare the tone of the last article with the one I posted. There's a pretty big difference. Not a single personal example, for a start.
throw new ArgumentException (String, String, Exception)
Two bottles of wine down my neck, bit of pop music down my ears, and I can't leave it alone.
Yeah, but why is any normal house in London worth £600k? Let alone a flat? It's an obscene amount of money.
But it's NOT reasonable- they shouldn't be paid so much, and their houses shouldn't cost so much.If it had been a £6 million house, then maybe I could see where a lack of sympathy comes in because that IS real money these days, but a £600k house is nothing special, especially in many areas of London, and is quite within the grasp of many sorts of reasonably well-paid people.
You call it envy, I call it massive boiling anger at the pay disparity between the poor and the rich in this country. If cleaners really are worth 1/6th of a doctor's pay, why have we had a massive problem of MRSA in our hospitals? There ought to be quewes of people looking to mop the floors and clean up, and be glad of the employment. Apparently though, a bunch of old people can die after we've paid for their hip replacements, and that's value spending.Spoiled little rich kids, eh? That was the point of mentioning GPs. You seem to be revelling in the fact they they got kippered, because you classify them as "Spoiled little rich kids", which is why people have suggested that it looks like a case of envy.
And like I say, I don't have a particular problem with doctors. Compared to council workers they do a good job.
Maybe I am. But who's the fool, if that's the case?I think you'll find that far from "no-one" having any sympathy, you're in the minority in your apparent amusement at someone else's misfortune is getting done over like this.
Right great. Have a look at recent stock market volatility, and then come back and explain how you're doing a good job please?
Well my current job is fine but feel free to headhunt me for anything you think I'd be suitable at. Years of harsh life lessons have made me amoral and I'm prepared to put the hours in.dude i got a 'd' at a-level maths, and a c at further...........
Probably not a sensible metric, I started losing my hair at 21 and by the time I was 24 I was thin enough that my fiancee insisted that I go for a No2 all over. I didn't have a stressful job until I was 27.Its not an easy or relaxing job, all the traders on my desk bar 1 are baldies, (where as only 1 person in say infrastructure IT is).
That'll be a failure of the administrator then?Also in over 2 years of this world i've only ever seen 1 person pack it in, to drive tubes.Yes, the vast majority of the CDO/CDS owned by LB have been cherry picked by the buyers.
Eh, so cut those adrift to be picked up by the taxpayer, problem solved.It was only a small percentage that where toxic.
Well, tulips have never, as I understand it, regained the value they briefly held in 1637.Think of it as the classic tulip speculation bubble, a new industry comes along, people get more and more excited about it, a value thats un-realistic gets assumed to be standard.
http://en.wikipedia.org/wiki/Tulip_mania
That'd be 371 years. Be a bit of a problem if todays markets took 371 years to regain 2008 levels.
It's not really that hard Alex. If you've a security based on a mortgage that was granted to someone on a 75% LTV _at the peak_, then it only takes a 33% drop in property prices for that once-kosher mortgage to suddenly become risky.The thing is many of these CDO/CDSs generally are undervalued and there are some people who are making a 'slow buck' buying them, the problem is that because trust has broken down, people are assuming its a Lemon Market so all the good stuff, gets priced as bad stuff, because its so hard to tell. This is the thing no one saw coming the breakdown of trust.
If you think that the vast majority of outstanding mortgage loans are sound on an LTV basis, you're going to have a rude shock
[Pausing here to post up and have a smoke]
Yeah, and with shorting a bubble has just happened. Are you trying to tell me otherwise FFS?!?But EVERYONE lost in credit, when the trust collapsed.
Right, so if I'd put £1k on property index puts in 2007 we wouldn't have a problem now. Sorry you're right, what a git I am for not doing that.You've always said property was overpriced, if you'd put your money where your mouth was and bought some puts on a property index, you might of saved the world from this.
We shall see.but you don't understand what they are? Lending money is a good idea and the vast majority of it was properly lent........
I manage bus drivers. I'll leave it at that.Yup, your a manager, when someone turns up for work hungover because they screwed up and had a little too much to drink last night?
Remind me again why they need a taxpayer bailout?In this case its a much, much easyer almost more forgiveable sin to screw up. In EqD i've seen plenty of traders who are up a lot, make a couple of really stupid posistions, so stupid tech boy 'ere knows their stupid.
Because we've put all our eggs in a basket of dodgy overpaid gamblers so when their greed overtakes them and they (inevitably) **** up we have nothing left to fall back on.
"Free speech includes not only the inoffensive but the irritating, the contentious, the eccentric, the heretical, the unwelcome and the provocative provided it does not tend to provoke violence. Freedom only to speak inoffensively is not worth having."
Well, I hate to sound like an announcement from the Ministry of the Flippin' Obvious, but it's worth that if someone will pay that.
What is anything worth? What you can sell it for. I have an old Olympus E20 digital camera here. It cost (and note I said "cost", not "was worth") about £1500 when new. It's in pristine condition, has a superb lens, takes superb pictures and is built to a very high standard. But it's 5 megapixel. What's it "worth" now? I don't know, but nothing like what it cost when new. More like 10% of that.
But consider, if you'd approached a bloke called Pierre-Auguste Renoir back in the late 19th century and bought a few of his paintings because they were nice punctures and you wanted to help an impoverished artist, what would they be worth now? Millions each. But why? After all, they're just a bit of old canvas with some daubs of paint, and you could buy the materials and have a go yourself for a few quid.
So why is a house in London "worth" £600k? Because someone will (or would have) paid that.
Why is a doctor worth (in salary) more than a cleaner? For the same reason that a picture painted by Renoir is worth more than one painted by you or me - because of the skill of the craftsman, and the demand for his or her services. Anybody can be a cleaner, but not anybody can be a doctor. For that matter, not everyone can be a journalist, or a web designer or a bus driver.
And, for that matter, not everybody wants to be those things. I wouldn't want to be a doctor despite the salary it attracts. I also wouldn't want to be either a cleaner or a bus driver, because neither line or work appeals to me.
That's the market economy for you. And unless you want a Stalin-esque centralised state where some bureaucrat a 1000 miles away decides, at birth, what your role in life is going to be, that's pretty much how it will continue to be.
Of course, true market forces are distorted by social intervention. On the one hand, the NHS controls a vast proportion of the demand for doctors in the UK, and so government has a huge impact on demand, and pay rates. It was, after all, government policy that introduced the contracts that resulted in current salary levels.
It's also government policy that distorts the market for cleaners. It is not a job a lot of people will actually want to do, and when you have a social security system that permits people (and for some, it certainly does) to decline to work in low-paid jobs because either they're better off on the social, or at least no worse off and they don't have to do an unpleasant job, then you're going to have a certain amount of difficulty getting people to do unpleasant jobs.
I make no judgements here on whether it is right or wrong that that is the case. I merely point out that it is the case. And therefore, in both the case of a doctor and a cleaner, ray rates (and differentials) are not determined solely by market forces.
Those Renoir paintings are worth so much because, in most people's opinion, he's a very good painter, because a lot of people want his work and, by virtue of his having been a single person and now being dead, the supply is limited .... well, fixed, actually. And demand is vastly larger than supply. I like a lot of his work, and would love to have one hanging on my wall. But not if the cost went above a few hundred quid, because I don't want one that badly. But ..... if I won £100 million quid on that lottery, I'd go to a few grand for one .... and still wouldn't get anywhere near owning one. But Bill Gates could donate me his entire fortune and I wouldn't spend millions on a painting to hang on the wall. Personally, my valuation of a painting, regardless of how good it is or who it's by doesn't stretch to millions. But for some people it does, or they wouldn't be "worth" that.
The same is true of my willingness to work either as a doctor or a cleaner. The salary a doctor receives doesn't incline me to want to be one, and I certainly wouldn't willingly work as a cleaner either, regardless of whether it paid what it does or paid the same as a doctor. But that's MY personal attitudes to doctoring and cleaning. If I had to work as a cleaner to feed and home myself, I would. But I don't know that I could be a doctor, even if I wanted to. I certainly don't have the vocation or inclination, and I have no reason to suppose I have the ability either.
But then, I'd suspect many doctors couldn't do what I do either.
We all have our skill sets. And society is prepared to pay a given amount, at any point in time, for that skill set. And with doctors, for instance, if you told them you were going to increase cleaners pay and decrease there's to the same amount, you'd find you had few if any doctors. A good proportion would either move to the private sector, or more likely, move abroad. And a fair few more would rather have the distinctly less challenging or stressful job of cleaning, seeing as how it now pays the same.
In other words, the reason things are worth what they are is that, other than government distortions, that's how the world words. Now, you can rail against what you perceive as social injustice either in what a given house is worth or the "value" placed on individual abilities if you like, but you're going to have about as must success as Canute had in ordering the tides about. At the end of the day, it's both a pretty pointless exercise, and a recipe for frustration and bitterness.
.... in YOUR opinion.
In mine too, as it happens, but that isn't the point. They're both still just opinion, our own value judgements.
But that isn't what this was about. It was about your apparent glee in people getting screwed by a nasty, manipulative trick. If someone had approached the owners of that £600k house and said "it isn't worth that, I'll give you £550k", then fair enough. Or if they'd offered £150k, again, fair enough. They might have accepted the £550k. A friend of mine saw a house he liked a few years back on the market at £420k. He offered £280k and got it. Why? Well, there were problems, like subsidence, and the kitchen was, quite literally, a shell. And it needed decoration top to bottom, and .... well, you get the idea. It'd been on the market for about two years with NO offers. So was it worth £420k? Nope, clearly not. Was it worth £280k? Not to me, but it was to my friend. And I don't have any problem with him offering £140k (33%) less than asking price.
My objection is to agreeing a deal, waiting until thousands of pounds have been spend on fees etc, and then reneging on the deal. It is nothing more than a (currently) legal form of extortion. And that's why I, and I suspect a fair few others, don't agree with your apparent glee ..... because it appears you think this couple deserve to be extorted just because they own a £600k house. And I don't agree at all, either that they deserve it, or that it's funny in any way.
A technical correction - I said it looked like envy, not that it necessarily was. I have no idea if you're envious of them or not, and you say not, and I see no reason to doubt your word on that. But it's how it came across, whether intended that way or not.You call it envy, I call it massive boiling anger at the pay disparity between the poor and the rich in this country. If cleaners really are worth 1/6th of a doctor's pay, why have we had a massive problem of MRSA in our hospitals? There ought to be quewes of people looking to mop the floors and clean up, and be glad of the employment.
As for MRSA, well, it's going rather off-topic and probably ought to be a separate thread, but here's a quick overview.
I don't entirely disagree about that massive disparity, though I think I'd rather use some ludicrously overpaid bankers as an example of that disparity than doctors. As for why we've had MRSA problems, personally, I'm inclined to think it's largely because of our current governments obsession with a target-led culture, and their apparent manic inability to let people at the sharp end actually do the jobs they're expert in.
Bring back Matrons in hospitals.
Okay, so they rules the place like a female version of Ghengis Khan, but you generally didn't find any hint of a lack of cleanliness in most hospitals with good Sisters and Matrons. If standards slipped, butts got metaphorically kicked.
At least in part, this is a sign of a fat and decadent culture. We are FAR better off, personally, than the vast majority were 50 years ago. Standards of living, generally, are far better, Of course, in part, that means we can afford to eat what we want rather than what we ought to, and whether that's necessarily in our own personal long-term interest is, in my view, dubious. We used to have FAR more proper veg, largely because we could grow it if need be, and because luxuries were either very expensive or simply now available (other than black market) even if you could afford the price. That was very much a social leveller, in terms of wealth. And there was far more of a genuine work ethic and far less of an entitlement culture.
Given the technology we have these days, given the machines and so forth, there is NO excuse for the likes of MRSA, other than a very rare outbreak. It is, instead, a sign of far too much political meddling, and of "managers" running things in the NHS, not nurses, doctors and matrons.
If you want MRSA sorted, it's dead easy. Bring back matrons, and given them the real authority to get the job done and, metaphorically, kick butts and, if really necessary, (literally) kick incompetents out of their wards (and their jobs).
MRSA is not, in my opinion, ANYTHING to do with relative pay grades. It's to do with standards, and localised authority and accountability ..... or rather, lack thereof. If you go back to the ethos where, on her wards, matron was God's superior officer, you'd get results .... and you'd get them right quick.
Rave please read a book called The Tiger that Isn't. You can't simply say things like that without a full understanding of the situation (which few minds can comprehend) It could easily be a hell of a lot worse. The current volatility is actually not that bad historically, when compared to say the great depression. I really don't think you (or the media) understand how much trust has been lost. There is some really shocking example i can't give you, so just take it from me its incredible how little trust is left. This is responsible in a large way for the massive vega, all accross the board. There is little one tiny firm can do to stop that !
yes, becuase thats how i got a job paying x times more than a cleaner, by saying to someone feel free to make it happen for me, i didn't work hard i just bought a scratch card.Well my current job is fine but feel free to headhunt me for anything you think I'd be suitable at. Years of harsh life lessons have made me amoral and I'm prepared to put the hours in.
Kinda the idea, look at whats happening with B&B (who where far more risky than NRK in lending pratcies, i think they've got the highest default rate of any UK lender too). The breakup of B&B is been much better handled than the NRK debacle.Eh, so cut those adrift to be picked up by the taxpayer, problem solved.
This is the point, the toxic baskets should never of been valued so high, the credit rating agencies will never be trusted in the same way again.Well, tulips have never, as I understand it, regained the value they briefly held in 1637.
http://en.wikipedia.org/wiki/Tulip_mania
That'd be 371 years. Be a bit of a problem if todays markets took 371 years to regain 2008 levels.
Ok, this is where your completely wrong.It's not really that hard Alex. If you've a security based on a mortgage that was granted to someone on a 75% LTV _at the peak_, then it only takes a 33% drop in property prices for that once-kosher mortgage to suddenly become risky.
If you think that the vast majority of outstanding mortgage loans are sound on an LTV basis, you're going to have a rude shock
[Pausing here to post up and have a smoke]
No its not that simple, its all about the risk of the holder defaulting. There is a risk of any mortgage that you wont get back the price paid. The thing is the poeple buying the CDOs had little knowledge of the underlying securitised equity, this is the idea of creating the credit market place (and secondary market places we know improve efficency and have been seen consistantly throguhout history to be, a good thing) they instead relied on BOND security. Based on the issuer, often bought via insurance. Now this is the fun part, a credit rating agency gives its risk in a quantified term. Based on that you work out the worth of the credit.
How on earth do you know these things are going to falter? The problem isn't a massive number of recessions, that might of been the spark in the US, but its certainly not true globally, the problem is these baskets are now worth squat. Even the good ones aren't trusted, because the ratings given to them turn out to bollocks backed with a junk bond.
This scares investors, and we get a perfect lemon market, which is what we have now. This isn't something someone predicted would happen on such a scale. We've already seen that you didn't put your money where your mouth is and buy some puts on a property index (and the whole 'oh if i had done that it would of saved everything' sarcasam is the same as people who don't vote).
throw new ArgumentException (String, String, Exception)
She knows that there is nothing wrong with your prostate either
\/ Whoops, corrected
Last edited by steve threlfall; 30-09-2008 at 03:19 PM. Reason: Grammar
Sort out your abbreviations mate... you just called me a prostrate!She knows that there is nothing wrong with you're prostate either
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