The Shock Doctrine is a good starting point.

Looks informative, but doesn't seem to address Argentina in particular at all. Didn't they default on national debt to get the disaster ball rolling?

It addresses the free market mantra of the Chicago school and how the 1970's political restructuring of the southern cone along free market lines set up the financial disasters that would hit in the 90's and 00's.

Wikipedia article

It's my mostly uninformed impression that the argentine crisis isn't much like what's going on now. I would like to hear some cannibal stories though.

DarkForest, I doubt the root causes were the same, but I'm still interested in what they were, how they got by during/after the collapse, and what was done to stabilize the country in the aftermath. Surely it's been studied?

More than by Wikipedia, I mean? Like I said, I can google.

"I doubt the root causes were the same" I think they are one and the same.

Sure then you can find out the basics of the situation on your own?

Well, then. Mods, plz delete. sorry to bug you unnecessarily.

Peace out.

Some books on the subject (that I have not read): Lessons from the crisis in Argentina ; And the money kept rolling in (and out) : Wall Street, the IMF, and the bankrupting of Argentina.

Also, I found a lot written in Spanish on this topic. Didn't post it here, but it is easily found.

Sure then you can find out the basics of the situation on your own?

Okay, I'm sorry -- my reply above was unnecessarily snarky -- hope me out here.

I don't post to Metachat much, so maybe I'm ignorant of the culture here. I was looking for a little informed discussion with people more knowledgeable on the subject, rather than links to wikipedia, which I thought I was something I tried to spell out in my original posting of the topic. It's obviously not AskMe material, as it would be shot down there as "chatfilter," or "HERE'S A LINK TO GOOGLE, MORAN!" so I was purposely trying to avoid that sort of ruffling of feathers. I don't know enough about the Argentinian situation to put together an informative enough Metafilter FPP that might engender the sort of conversation I was looking for, so I thought this site (amongst the loose confederacy of Meta-related sites, that is) was the berst outlet for the type of thing that was on my mind.

Am I mistaken about the point, and general tenor, of MetaChat? Can some site veterans either slap me silly & tell me to buzzoff, or otherwise give me some idea about why this isn't going well?

arse_hat & initapplette, I appreciate the links to the books. I am looking to do some reading, so those may be launching points for me on the subject. Please bear in mind that I'm a simpleton who almost didn't graduate high school, so all my further education has taken place either through conversation or reading, but I don't want to read the wrong things, if it's blindingly obvious to someone who actually knows some knowledgy stuff that they're written by crackpots.

I also figured there'd be a wealth of Spanish-language info, but I speak Spanish well enough to get gas, order dinner, & ask road directions. I don't think I'm capable of pursuing Advanced Spanish & Macro-Economics in one go.

I think they are one and the same.

What do you think the root causes are?

Unless you're referring to the problems of capitalism and certain free market ideologies in general, I don't really agree.

Central to the Argentinian crisis was a currency crisis. Any time a government tries to support its weak currency and extend its borrowing by pegging to a stronger currency (the US Dollar, in this case), it's a recipe for disaster. The current crisis hasn't results in a currency crisis for the US--in fact, just the opposite, since the US Dollar (in the form of US Treasuries) is still the most credible safe haven in the world.

I don't post to Metachat much, so maybe I'm ignorant of the culture here. I was looking for a little informed discussion with people more knowledgeable on the subject, rather than links to wikipedia, which I thought I was something I tried to spell out in my original posting of the topic.

Well, I don't think people here are exactly experts on economics. What you may have interpreted as brush offs, may have actually just been people essentially saying "I don't know exactly what to say, but it looks like this book/link may help you." I certainly enjoy these kind of threads/discussions.

Well Devils Rancher, you should hang out here more. mullacs comments are very apt.

We are a pretty friendly bunch, for the most part. Just watch out for [name redacted]. Bad news, that one.

Am I mistaken about the point, and general tenor, of MetaChat? Can some site veterans either slap me silly & tell me to buzzoff, or otherwise give me some idea about why this isn't going well?

There's nothing wrong with your thread, per se. The mecha userbase is much smaller than mefi's, so it's probably just that nobody here really knows much in answer to your question. A couple of people made an effort, which you seemed to find unsatisfactory and didn't seem to appreciate that at least they tried.

My wife's family is Argentine, so I feel I should know something. But I don't, other than all her aunts/uncles/cousins are alive and well and making (made?) the best of it they can. It's not post-apocalyptic down there or anything.

I was looking for a little informed discussion with people more knowledgeable on the subject, rather than links to wikipedia, which I thought I was something I tried to spell out in my original posting of the topic.

There just aren't that many people reading and posting here. This might be an area that a few people know about, but for a lot of people, it's kind of specialized and we're not that informed, so the best we can really say is "go Google" or post some links, which is actually probably just people trying to be helpful. There's nothing wrong with the post at all - the difficulty is just that there aren't a lot of people here who know enough about this topic to have the discussion. I don't think anyone's trying to be rude or suggest that the post wasn't right for MetaChat - just that the community at large doesn't have a whole lot to draw on.

Or, what dano just said.

A couple of people made an effort, which you seemed to find unsatisfactory and didn't seem to appreciate that at least they tried.

Let me disabuse you of this misapprehension. I do appreciate the efforts made. I thanked them both, above. I just became unsure, as a neophyte, if I was in for deserved haranguing at the hands of [name redacted], or if the thread was okay. I'm sailing in uncharted waters, and am a fairly inept oarsman. Apologies again, and I'm glad your extended families came through -- I had some Argentinean expat friends who I haven't seen in some years, and I occasionally wonder how this affected them all.

On preview -- see? there's one thing I didn't know at all, Miko -- the size of the MetaChat user-base. I probably overlooked the "xxxxx members" doo-dad somewhere. Speaking of which, did you notice that The Cabal silently disappeared the one on the FP of Metafilter? ooo-EEEE-oooo...

On preview -- see? there's one thing I didn't know at all, Miko -- the size of the MetaChat user-base. I probably overlooked the "xxxxx members" doo-dad somewhere. Speaking of which, did you notice that The Cabal silently disappeared the one on the FP of Metafilter? ooo-EEEE-oooo...

That figure is not accurate. It tracks people who have gone at least part of the way through the registration process. So you could set up your username, get most of the way through, and when you run into the PayPal section, you might quit, because you don't have a PayPal account. And even though you've quit, you've still created a usernumber. That's my understanding of it.

There are lots of active accounts on MeFi. Maybe even five figures' worth.. But 80-90,000? Nah.

Central to the Argentinian crisis was a currency crisis. Any time a government tries to support its weak currency and extend its borrowing by pegging to a stronger currency (the US Dollar, in this case), it's a recipe for disaster. The current crisis hasn't results in a currency crisis for the US--in fact, just the opposite, since the US Dollar (in the form of US Treasuries) is still the most credible safe haven in the world.

So they voluntarily un-pegged their currency from the dollar & it went into a tailspin? Did they have no real-world choices, or was this something the IF/World Bank foisted on them as a "solution?"

I know the dollar is floating, but what about Chinese currency? Another dumb wikipedia question -- is it not pegged to the dollar? what would happen if the Chinese lost confidence in the dollar -- sort of a reverse-Argentina?

It's obviously not AskMe material, as it would be shot down there as "chatfilter," or "HERE'S A LINK TO GOOGLE, MORAN!" so I was purposely trying to avoid that sort of ruffling of feathers.

You can safely assume that, no matter how innocuous the topic may seem, SOMEONE is going to get a bug in his butt about it. For some ridiculous reason or another. It's just the nature of the beast.

I've found myself enjoying that place much more since I decided to stop overthinking it and go ahead and do what I like.

I've found myself enjoying that place much more since I decided to stop overthinking it and go ahead and do what I like.

Oh, internets -- why do you confound me so? Beans and more beans! Are Lima beans from Lima Peru? That's close to Argentina. Something to overthink about, right there.

Lima beans have been cultivated in Peru since 6000 B.C., and their common name comes from Lima, Peru's capital city. Fun facts about lima beans.

Maybe bean counters used them in Incan bookkeeping.

Excellent derailure!

:)

Here's a true story. Right before I posted about the lima beans, I was having a tea emergency, just wanting black tea, or something brisk, and scrabbling through my cupboard... chamomile - no; green tea - no; mountain herbal - no; tilia - I don't even know what that is; hibiscus - no; ah, some chai - this will do...

and then, a few minutes later I was preparing the cup and I saw that the small box of "tilia" sitting on the counter where I left it. Except it didn't read "tilia", it read "lima", and then I slightly freaked out and looked at the box carefully, and on one side of the box it's labeled "Tília" and on another side it's labeled "Tílio" - and on the third side it's labeled "Lima".

So they voluntarily un-pegged their currency from the dollar & it went into a tailspin? Did they have no real-world choices, or was this something the IF/World Bank foisted on them as a "solution?"

I'm not sure what other real-world choices existed, but it's a fundamental reality of a pegged currency that you have to maintain reserves of the currency you peg to. Argentina simply didn't have enough dollars to satisfy the claims of all the peso-holders who wanted to convert. It could try to persuade people to hold pesos by raising interest rates, but that would also harm the economy (reduces spending/investment) and thus requires significant political will. It could also generate more dollar reserves by selling more exports and buying less imports. But the peso was overvalued due to its US Dollar peg, making exports too expensive and imports cheap for Argentinians. This caused even more dollar reserves to flee the country.

So Argentina had to borrow to keep up with its consumption levels (both public and private). But Argentina already had too much government borrowing and the lenders were losing faith. Once peso-holders realized the dollar-peg was untenable, they started a run on the banks. Ultimately, Argentina couldn't borrow any more and had no choice but to de-peg to stop the bank runs.

There are plenty of political arguments to make here. Some people want to compel lenders to forgive debt. I believe there is a history in Argentina of privatizations of state-owned industry, which may have not been so wise or fair. I don't know enough to comment on all that.

I know the dollar is floating, but what about Chinese currency? Another dumb wikipedia question -- is it not pegged to the dollar? what would happen if the Chinese lost confidence in the dollar -- sort of a reverse-Argentina

Unofficially, yes, the Chinese peg their currency against the US Dollar. The interesting and important difference is that the Chinese want to keep the value of their currency DOWN, not UP. China wants to make sure the US and the world can afford its exports. So China buys US dollars (in the form of US Treasuries and Agency MBS) in massive quantities.

Many people fear that the Chinese will lose their appetite for the dollar--which would be devastating to the US. But recent economic data shows that China is really suffering in this financial crisis, more so than many economists expected. China essentially finances America's ability to buy its good. It's sort of like Mutually Assured Destruction--the US consumer needs the foreign financing, but the Chinese need to maintain its break-neck growth rate to keep unrest and riots at bay.

Lima tea? Is that tea from Peru or tea made from beans?

I was puzzled, actually. One day when I asked my husband to pick up some tea (thinking standard old Lipton) while he was out, he apparently had no idea what that meant and bought every tea he saw. This was one of them. Now I've found this, so it's a Greek tea I usually know as "flamouri"... and I found out it comes from a tree called "Tilia argentea (lime-tree the silvercoloured, common names flamouria or flamouri)..."

So the "Lima" for "lime tree" I guess.

It was pretty weird, though, coming exactly on the heels of the "Lima" convo.

oh... and it has the "argentea" in there, too, which is like "Argentina" and "tea" smooshed together.

Apparently the gods are trying to send me some information that has to do with Lima, lima beans, or lime, plus Argentina and tea. It must be important, but I can't figure it out.

YOU CAN ALL GO RIGHT TO HELL, WITH YOUR TEA AND YOUR LIMA BEANS AND YOUR BRAIN-NUMBING QUESTIONS ABOUT ARGENTINIAN ECONOMICS!!!!

Love,
Redacted.

I think Redacted's account has been hijacked. Or maybe sold on E-Bay.

Awww... did someone have his love redacted? That's so sad.

It must be important, but I can't figure it out.

You're supposed to invest everything in tea -- not just tea futures -- I'm talking tea you can lay your hands on. Fill a ship with it, if you can, and sail immediately for La Plata, where you should wait offshore for the global collapse.

After that, if China unpegs its currency from the dollar, and pegs it to oolong tea, which I think is what we're looking at here, since essentially they have no choice, this is where you rush in and [redacted]

Oh, and thanks mullacc for taking the time to post something thoughtful on the OC. One hopes you're right about the MAD policy with China.

Devils Rancher, I'm sorry if you somehow felt you got the brush off. I recommended the book I did because I really believe it is a great primer on the role of the IMF, World bank, and the Chicago School of Economics and their influence on economics, trade and the politics of the USA, South America, UK, Russia, South Africa , Poland, the Asian Tigers, and much of the Middle east.

"I think they are one and the same.
What do you think the root causes are?
posted by mullacc"

When I said I believe that the root cause of Argentina's and the US's problems are the same I was referring to the acceptance of Milton Friedman's ideas of an unfettered marketplace.

Uncle Milty felt that people had to be shocked into a free market. The best market is one in which people with capital can move their money anywhere and charge any price for that capital. In order to achieve that market people must be pushed out of the crib and onto the auction floor.

For the US that means things like; fire all of the air traffic controllers and hire them back at lower rates or hire other people off the street. Deregulate the media and allow one or two firms to own all the TV, radio, and papers in a market. Get rid of fairness doctrines and advertising time limits per hour. (of course keep regulation that allows you to fine people for showing boobs on the TV or saying fuck on the radio). Deregulate Saving and Loans (remember them?). Deregulate Merchant Banks (remember them?). Deregulate banks and brokerages. Let firms that sell investments rate those investments with a self regulated Chinese Wall separating those functions. Let Insurance firm do unregulated business and let hedge funds bet on that business. Enact Right to Work (fire your ass for no reason) regulations.

In Argentina it meant things like crushing unions and destroying a mixed economy. Much of the Southern Cone had a mixed economy. They were not Communists. They had a democracy and free markets but the government controlled how that market went. They held onto natural resources and allowed craft workers to form co-ops. They sheltered farmers to allow the land to stay owned by people who actually live in the country and who have a stake in it's welfare. Western nations, the US writ large, pushed for a totally open market with land and resources sold off at bargain prices and workers stripped of protection from competition from outside the country.

This shocking introduction to unfettered markets often required that the people of a nation be pushed hard. Free markets often meant the G7 nations had to support dictators and generals. This left common people making less money, often to the point of not being able to have a home and buy bread.

Argentina bent over and took it up the ass for an open market.

The current US situation rose fom the same roots.

I have $100,000 to make money off of. Lending it out to someone is a way to make some cash. I invest in mortgages. The dude who lends out this mortgage money gets paid up front for a lot of things so he is willing to loan out money to Bob.

Bob borrows $100,000. He has poor credit and very little income so he agrees to pay interest each month and none of the principle. I start to worry about Bill's ability to pay me back so I look for some insurance. I call on a friend, Wendy and offer a deal to her. If she agrees to pay off Bill's remaining debt in the event he can't pay I will pay her 2% or $2000 per year.

I get peace of mind and Wendy get a revenue stream. That's just like insurance. You pay out a small value of your car each year and the insurance company agrees to pay you off in event of an accident. But this is NOT insurance. Insurance has it's own set of rules and regulations. What this IS, is called securitization.

If Bob defaults and does not pay me Wendy can cover my risk to Bill's debt in two ways. We can agree that she will give me a "cash settlement", That is she will give me some portion of Bill's debt upon default. This is less than the amount Bob still owes in total but enough that I feel I can pay her my premium over the life of Bob's loan and yet still invest the cash in something that will make me a profit. She believes with Bob's payments and my premiums she will make a profit.

The alternative is "physical settlement". I will give Wendy Bob's debt at full value because she believes she can sell in the market at a lower value than it's face value but with my premiums it will still make her a profit.

The method we chose for payout in event of default will of course determine the monthly amount I will pay her for covering my exposure to Bob's debt.

Securitization has been around for about 40 years. As you might guess most securitization is not quite so simple as the example I laid out above. Securities debt is usually a bundle of debts. These may be mortgages, leases on industrial machines or computers, credit card debt, corporate takeover bonds, or car leases. These bundles of debt are often then further split up by exposure to risk. These exposure plateaus are called tranches.

Often the papers and the TV and the blogs will call tranched securitized debt, a derivative. It is not. A tranched securitized debt is backed by a cash producing debt. Someone is paying money on that debt. You may have a big risk but you still have a claim against a real debt that someone is still paying against.

Now Wendy is securitizing my debt and the debt of a bunch of other folks. She feels she needs protection so she securities her $2,000,000 debt to Qwerty bank.

To recap, Bob owes me $100,000 and Wendy has agreed to guarantee his loan and others to the tune of $2,000,000 in return for a revenue stream each month. Qwerty bank has agreed to guarantee Wendy's debts in return for a monthly fee.

Qwerty bank is on the hook for $2,000,000. That's debt for the bank right? Wrong. That is an asset for the bank. Someone, however abstracted, owes Qwerty $2,000,000. In addition, someone (Wendy) owes them a monthly payment. That is revenue and assets! That's good! The more assets (money that may need to be paid out to others) plus revenue (money paid to take on the risk of other folks debts) makes the bank worth more money in the market.

Of course Qwerty bank has more than just Wendy's debt. It holds many tranches of debt. Qwerty bank must securitize it's debt. Yeah baby! Round and round goes the debt! Still, U.S. banks have some few regulations.

So the bank sells off risk to someone else. Say an AIG subsidiary in London. AIG agrees to cover the risk in return for money from Qwerty bank.

Now we bring in the Hedge funds. They sell risk of default on Wendy's debt even though they don't hold any of her debt. They are betting that Wendy will default and that they will get paid off for debt they don't own. The purchaser is taking the Hedge funds monthly fee in hopes Wendy does not default. THAT is a derivitive.

In turn the guarantor of the hedge fund's risk sells off it's risk to the hedge funds.

Recap. Money is loaned out to high risk people because the fees up front make for a good business. The risky debt is bundled up and "insured" by someone for a fee. That "insurer" then "insures" that debt to people who don't even own that debt because that is yet more money comeing in. The "insurer" then sells risk to others.

All of this Credit Default Swap is traded Over The Counter (OTC) and has no central exchange so no one really knows how big it is. Still, estimates put it at more than 10 times the capitalization of all the stock exchanges in the world and that is several times the value of the US GDP.

The bad debt circus hit England and Scotland.

While I do believe free markets are the best method of exchange between heterogeneous groups I also believe such markets need to be regulated to protect them from greed. So I believe Milton Friedman's unfettered marketplace is the cause of Argentina's economic pain as well as the US's, and the UK's and Asia's and Russia's and so on.

A few notes. I have a degree in Political Economy that I have consumed many beers in order to forget.

I think the new US president is just two degrees off course from the last one who was two degrees off course from the one before that. I believe the US has been on a steady drift to the right since Nixon and that the UK jumped on board with Maggie and no matter the name of the government has stayed the course. Canada has tried to stay with a mixed economy but we keep falling for the siren song of the unfettered market from time to time.

I still recommend The Shock Doctrine but I must say I worked with Naomi Klein's husband's father. It is late and I may find many mistakes here in the daylight. This is why I try to stay away from talking poletics and economics. I am a Benthamite.

I meant to add Warren Buffett's view of the derivative driven debt crisis back before anyone was calling it that.

Wow. Just that post will take me all weekend to digest. I get paid Friday and maybe Book People has The Shock Doctrine.

I understand what credit default swaps are & what they've done to the financial system here, and am of the opinion that their inventors should be imprisoned for treason. Thanks again for the expansion, there. I figured IMF demands had something to do with Argentina's collapse (Ohhh, you're in dire need of money? You want more? you do this)

I still want to see what I can turn up about how normal people there lived through the collapse & what the next govt. did to rebuild. I think there may be a lot for us to pay attention to there. just incase, ya know.

If she agrees to pay off Bill's remaining debt in the event he can't pay I will pay her 2% or $2000 per year...But this is NOT insurance. Insurance has it's own set of rules and regulations. What this IS, is called securitization.

That's not securitization. That's insurance! When banks/hedge funds do it, it is in the form of credit default swaps. When insurance companies like MBIA and Ambac do it, they just call it insurance. Securitization is the pooling and tranching you described right after that.

Qwerty bank is on the hook for $2,000,000. That's debt for the bank right? Wrong. That is an asset for the bank.

Qwerty bank does NOT have a $2MM asset on its balance sheet as a result of this transaction. If that were the case, the entire notional value of the CDS market would reside on the balance sheets of various financial institutions. That clearly isn't the case. Derivative accounting is really tricky, but generally a CDS is recorded at cost or at fair market value--fair market value being in this case the calculation of the present value of the premium payment stream less the present value of the expected payment in case of default. It's very possible that the fair market value of a CDS is negative. Before recent accounting changes, most CDS didn't even show up on banks' balance sheets.

Anyway, sorry to nitpick, but in short I have a lot of problems with arse_hat's example. But I generally agree with his conclusion--there ought to be more and/or better regulation, especially as it concerns the derivatives market.

But I like credit default swaps. They provide the essential means of hedging against the credit risk of a borrower separate from the interest rate risk of a particular security. And the CDS market mechanism provides great information about the market's view of the creditworthiness of a borrower. The CDS market should be more heavily regulated*. Specifically the market should be conducted on a regulated exchange and reserve requirements should be put in place--much like the Chicago options and futures markets.

*However, I also want to point out an under-reported fact: the settlement of the CDS contracts after the default of Fannie/Freddie and Lehman Bros went very smoothly. There was an auction to determine the final price of the bonds and billions of dollars of cash changed hands. Many people predicted that the settlement of these CDS contracts would cause financial armageddon--that counterparties could not be determined or that the cash payments would cause a wave of bankruptcies. None of that happened.

Heh I was wondering when you would show up. "That's not securitization. That's insurance!" No it's not.

Yes I was not clear on Qwerty bank assets. Too fast and loose. Mea Culpa.

"Many people predicted that the settlement of these CDS contracts would cause financial armageddon" I missed that, but yes, it went smoothly and so I am sure we can unwind all the other positions over the next 3 years with a minimum of pain.

I'm not sure I understand what you're getting at with the links to AIG's meltdown. AIG wrote more protection in the form of credit default swaps than it ever should have and did so without building the proper reserves. That's clear. But selling protection in the form of CDS is still insurance--just an unregulated form of it, done very poorly in this case.

But my point wasn't really that CDS is insurance, my point is that CDS is NOT securitization. The term securitization refers to the "pooling and repackaging of cash flow producing financial assets into securities that are then sold to investors"(from your wiki link). CDS can't be securitization because neither party needs to have ownership or security over the referenced asset--it's purely a derivative.

I missed that, but yes, it went smoothly and so I am sure we can unwind all the other positions over the next 3 years with a minimum of pain.

Well AIG already proves that it will indeed be painful. But MBIA and Ambac were writing regulated insurance and they blew up even quicker. Credit default swaps as an instrument for risk transfer are not the problem--the problem is that market participants lost sight of the risks they were taking.

Go back. I never claimed a CDS is securitization. "But selling protection in the form of CDS is still insurance--just an unregulated form of it". No it's not insurance in any form recognized under common law or Napoleonic code. "CDS can't be securitization because neither party needs to have ownership or security over the referenced asset--it's purely a derivative." And there is the issue.

This is definitely one of those internet subjects I don't give a damn about but still get drawn into. I really hate that. I loved debate at one time. I can't be bothered now. I've really cut down on my internet exposure over the last couple of years but clearly not enough. I really need to cut the link all together.

You didn't directly say CDS is securitization, but you said this:

I call on a friend, Wendy and offer a deal to her. If she agrees to pay off Bill's remaining debt in the event he can't pay I will pay her 2% or $2000 per year...I get peace of mind and Wendy get a revenue stream. That's just like insurance...But this is NOT insurance...What this IS, is called securitization.

...which is exactly the structure of a CDS, so I figured that's what you were referring to. In any case, the arrangement you describe above is not securitization as that term is used in practice.

I'll take your word for it that CDS are not insurance under common law or Napoleonic code. I feel like we're giving the word "insurance" a virtuous connotation. It's all just risk-taking in my mind, what you call it just determines who your regulatory body is.

Anyway, sorry to drag you into a debate you don't care about. This is stuff I deal with as part of my job, so I tend to get passionate about it.

This is great stuff. Thanks for the debate; if you guys didn't learn anything, I sure did. Expanding horizons and all that jazz. I used to work in the field, (foreign currency swap derivatives, then regulatory capital) and I didn't understand shit beyond my desk and the desk of my boss, plus this and that about clustering algorithms and risk capital regulation.

I'm glad I work with my hands now. It doesn't pay well but it doesn't get on my nerves either.

"Anyway, sorry to drag you into a debate you don't care about. " You didn't draw me into anything my friend. I walked in of my own accord. I really used to care about politics and economics. I really felt it was relevant to my life. Sometimes that still bubbles up. Of course I have not been paying any attention to such things so my info is often faulty.

"It's all just risk-taking in my mind, what you call it just determines who your regulatory body is." That was really the point I was trying to make in my off the cuff rant. Insurance and re-in, and underwriting all have regulations and requirements. CDS just operated on the frontier like "judge" Roy Bean.

I love a free market but I also believe a free market never stays that way without external oversight, what with human nature and all.

Hugh don't look to me for no lernin. I am just wandering in the dark!

Here's something Mr. Freeman, my seventh grade Social Studies teacher, said to me, that took me twenty-some years to really start to understand:

"We're all trying," he said. "Everybody, everywhere, is trying; trying to do something. That's how we get history. Even people who give up are just trying to give up, you get me?"

Sometimes when I want to grab an ax and go all Raskolnikov on my increasingly abusive octogenarian landlady, I think, easy boy, she's only trying, just like anybody else. But that's neither here nor there.

What I really mean is that this kind of financial engineering boggles the mind and defies understanding, and it really takes a collaborative effort between lots of people to see the forest for the trees. I think a lot of the trouble comes when the highly placed executives think their placement and their salaries are proof that they alone have a handle on the whole thing; this hubris permeates the upper-level culture of the biggest, most over-leveraged banking corporations around. The fact that they are by and large lawyers and not bankers (acquisitions, the name of the late 90's game, got lawyers promoted to CEO positions) and therefore care more about image than practice... oh, I could go on, but it's a bit much, anyway.

I just wanted to say, thanks, to both of you; every bit of understanding that we share counts, even if we don't or can't use it, because we are all just trying. In the end, we're all making history.

Well thank you Hugh. Sometimes I do miss teaching. I loved the density of questions and answers I got and the fact that an evening could end up unfolding at a loud bar as people talked about the nature of time or the reason for existence. If you enjoyed the exchange of information such as it was then I know my bloviating did more than just add to global warming. That's good.

OK. If you really want to understand the socio-political-economics of the U S of A.

DO NOT MOCK BILLY MAYS.

I do NOT mock, for Billy is a god walking among us. I'll give you my OxiClean when you take it from my cold, dead hand.

Damn right.

≡ Click to see image ≡

And the man is a TRUE man for he sports a full beard and mustache.

Damn right, again.