A Visual Explanation of the Current Credit Crisis
- Thread starter RoyalRadande
- Start date
- Status
Now that you guys understand CDOs, consider that this is just how the whole global economic mess got started.
CDO's (those sliced-and-diced crap mortgages that were re-packaged to 'reduce risk' i.e. hand the ticking bomb to the next sucker) were then, at the investment banker level, FURTHER sliced and diced and repackages into an entire galaxy of crazy-math "instruments" with a whole slew of alphabet soup acronyms. CDO2's (squared CDO's), SIV (structured investment vehicles), SSIVs (Super SIVs), etc etc ad nauseum.
These mind-bogglingly huge turdballs, made up of exactly the garbage toxic waste you already understand from the video, were made even more unmanageable and unstable by the magic of "financial engineering" (think if Swamp Thing and Godzilla had a baby). These TRUE Weapons of Mass Financial Destruction, as Warren Buffet calls them, were then peddled all across the globe by, among other fraudster entities, "hedge funds" (we'll discuss why they are no such thing some other time), to everyone from central banks to pensioners in the backwoods. There is almost no financial entity anywhere in the world that did not drink this poisoned koolaid in some manner, whether they knew it outright or not.
And that's why horrible, frightening things are happening. Why your stock portfolio is shit, your 401K is a 101K, why Iceland's economy has already collapsed, why Hungary, Poland and Turkey (among others) are on the verge of collapse right this second, why ALL the major western countries are teetering on the brink, why the BRIC countries (the major emerging economies of Brazil, Russia, India and China) are having their economic expansions mega-spanked, why trade protectionism is rearing its ugly head everywhere and why every single country is rushing to devalue its own currency before its neighbor does it first and screws them over.
Because all that toxic waste is finally being understood by the masses for what it truly is - the biggest con ever in history. And those left holding the bag want to pretend its not full of dogshit just long enough to pass it on to another sucker down the line, but there aren't any left.
There's an old Chinese curse: "May You Live In Interesting Times".
That we do, my friends.
CDO's (those sliced-and-diced crap mortgages that were re-packaged to 'reduce risk' i.e. hand the ticking bomb to the next sucker) were then, at the investment banker level, FURTHER sliced and diced and repackages into an entire galaxy of crazy-math "instruments" with a whole slew of alphabet soup acronyms. CDO2's (squared CDO's), SIV (structured investment vehicles), SSIVs (Super SIVs), etc etc ad nauseum.
These mind-bogglingly huge turdballs, made up of exactly the garbage toxic waste you already understand from the video, were made even more unmanageable and unstable by the magic of "financial engineering" (think if Swamp Thing and Godzilla had a baby). These TRUE Weapons of Mass Financial Destruction, as Warren Buffet calls them, were then peddled all across the globe by, among other fraudster entities, "hedge funds" (we'll discuss why they are no such thing some other time), to everyone from central banks to pensioners in the backwoods. There is almost no financial entity anywhere in the world that did not drink this poisoned koolaid in some manner, whether they knew it outright or not.
And that's why horrible, frightening things are happening. Why your stock portfolio is shit, your 401K is a 101K, why Iceland's economy has already collapsed, why Hungary, Poland and Turkey (among others) are on the verge of collapse right this second, why ALL the major western countries are teetering on the brink, why the BRIC countries (the major emerging economies of Brazil, Russia, India and China) are having their economic expansions mega-spanked, why trade protectionism is rearing its ugly head everywhere and why every single country is rushing to devalue its own currency before its neighbor does it first and screws them over.
Because all that toxic waste is finally being understood by the masses for what it truly is - the biggest con ever in history. And those left holding the bag want to pretend its not full of dogshit just long enough to pass it on to another sucker down the line, but there aren't any left.
There's an old Chinese curse: "May You Live In Interesting Times".
That we do, my friends.
Seriously?
Well, my suggestion would be to hunker down until its clearer how things will shake out globally, say another year or so. That means increasing your savings and holding on to real assets.
Get out of the casino. Unless you're a very expereienced daytrader, don't even attempt the stock market. Unless you're a very experienced currency trader, don't even attempt the forex market. Don't buy any government debt vehicles, the government is devaluing the dollar to get out from under the crushing debtload. Park my money in a 30-year T-bill at 1%? Nuts to that.
Park your cash in fast rollover CDs, 3 months or 6 months max so you can have max liquidity as needed. Keep an eagle eye on the banks you do business with, if there's even a whiff of trouble, take your money out of there pronto. Don't rely on the FDIC to insure your deposits, they barely have enough on tap to cover one one-hudredth of deposits. If there are a series of bank runs, you are screwed.
Get some physical gold as insurance, if you can actually find physical right now. Don't buy gold ETFs, those things are the newest ponzi scheme, you're buying paper-backed paper there's no real gold there. Gold is insurance, not an investment. Put it somewhere that the government can't grab it, like they did the last time there was a badassed economic problem in America.
Asset prices will fall for a little while, that means real estate and cars. Don't buy a new car. If you see a serious bargain in real estate, and the numbers make sense to you (understand that the market is still in freefall), then go ahead and grab the land. Some of the biggest fortunes that came out of the Great Depression were made on real estate.
Mostly, hunker down, diversify your income streams, and wait for the storm to blow over.
Like bread dough, the South, and Britney Spears, the USA will rise again!
No not really
Kidding...thanks for that perspective. But you didn't mention anything about buying guns in there?? wtf.
im lookin to get some real estate now, so i have something physical instead of just some numbers in ze bank. Not so sure if thats any better right now, but at least i'll have some shelter.... i think.
- Status