BBC2 now - Inside Job.

[Otispunkmeyer]

996c2 said:

I thought Goldmans bought lots of CDS for CDO that they did not own. I agee that buying CDS for CDO that you own is hedging your risk. However, buying CDS for CDO that you don't own is just betting against that CDO surely?

I think quite a few people / groups bought CDS for mortgage CDOs and all sorts of other things. Companies like AIG didn't expect the housing market to die so effectively they thought they were taking insurance premiums from people with very little risk of paying out.

Thing with CDSs was you could buy them for anything even if you don't own it. With normal insurance you insure your stuff, you can't insure say a house you don't own. With CDS you can insure that house and get paid when it burns down.

All it did was magnify the hurt. When it al went south AIG didn't have to just pay out to the CDO owner. But all the other stooges who looked at what the CDO was made of and decide it was a crock of st. The CDS used in that way effectively creates a money problem out of nothing. ( wanted to say creates risk or leverage but not sure that's the right description)

If anyone is interested go on Vimeo and search for MarketPlace. A guy on there paddy Hirsch explains very well what all these CDO, CDS, carry trades etc. are and how they work, what they were designed for, why they are good and also why they can end up leaving you in the mire.

[Sebo]

Just watched inside job: Storyville.

Having read quite extensively on the topic, not much surprised me. I was however blown away by the academic conflicts of interest at the ivy league universities. I guess it's obvious really but something I hadn't ever considered.

[Eric Mc]

I don't think the general public really understand the influence economic academics have on politicians. Indeed, most politicians are singularly lacking in any true economic understanding - with possibly the exception of Ed Balls - who is a qualified economist - and which only serves to prove that knowing your subject does not mean you can make sensible economic policy.

I was amazed to find the the former Chairman of the Federal Reserve, Alan Greenspan, was very much influenced in his student days by the extremely odd ball philosopher, Ayn Rand. I am sure that much of our current problems have been influenced by truly strange people.

http://en.wikipedia.org/wiki/Ayn_Rand

[Oilchange]

I watched it and got the impression that no matter how dubious the decisions were, the idiots who made them would try to wriggle out of blame simply because they got rich in the process then leg it.
I think people like Fred Goodwin will happily live with themselves knowing they are rich and people will eventually forget about them.

[AJS-]

Eric Mc said:

I don't think the general public really understand the influence economic academics have on politicians. Indeed, most politicians are singularly lacking in any true economic understanding - with possibly the exception of Ed Balls - who is a qualified economist - and which only serves to prove that knowing your subject does not mean you can make sensible economic policy.

I was amazed to find the the former Chairman of the Federal Reserve, Alan Greenspan, was very much influenced in his student days by the extremely odd ball philosopher, Ayn Rand. I am sure that much of our current problems have been influenced by truly strange people.

http://en.wikipedia.org/wiki/Ayn_Rand

There are many worse people to be influenced by than Ayn Rand, oddball and mainstream alike.

She wasn't that odd ball anyway, very popular in the US and pretty well known world over.

[Tonberry]

I can't seem to find this on iPlayer.

Linky?

[Sebo]

Tonberry said:

I can't seem to find this on iPlayer.

Linky?

Not sure if it's still available as I had sky+'ed it and watched it today

[Eric Mc]

AJS- said:

There are many worse people to be influenced by than Ayn Rand, oddball and mainstream alike.

She wasn't that odd ball anyway, very popular in the US and pretty well known world over.

She was obviously extremely charismatic and the leader of a small group of intellectuals who seemed to worship at her feet.

But she did seem an extremely strange person to me.