... but I suspect this may be one of the best.
John Lanchester wrote a brilliant piece in the London Review of Books that I return to once in a while, partially just for a good laugh:
http://www.lrb.co.uk/v31/n10/john-la...r/its-finished
"All of this makes RBS’s corporate report for 2007, published just weeks before the bank had to go back to the markets for more capital, a document of unusual interest. Northrop Frye somewhere defines ‘irony’ as involving a state of affairs in which words have a different meaning from their apparent sense. This can be achieved by the audience’s knowing something the speaker doesn’t: so the speaker is saying one thing but we are understanding another. The RBS corporate report is like that. (So are their slogans: ‘Make it happen.’ Make what happen? A £100 billion tab for the taxpayer?) The section on corporate citizenship at the beginning is particularly good value. The firm is involved in plans to increase general levels of financial education. ‘When people have been educated about money and how to work with financial services firms they are more likely to make the right decisions and to avoid difficulties.’ That’s true, but you can also just rob post offices. ‘RBS is a responsible company. We carry out rigorous research so that we can be confident we know the issues that are most important to our stakeholders and we take practical steps to respond to what they tell us. Then occasionally, we blow all that shit off, fire up some crystal meth, and throw money around with such crazed abandon that it helps destroy the public finances of the world’s fifth biggest economy.’ See if you can guess which of those sentences is not in the report."
Anyway, he's just come out with "I.O.U.: Why Everyone Owes Everyone and No One Can Pay."
I'm going to trundle down to a bookstore tomorrow and buy it but here's an early review that shows some promise:
http://www.theglobeandmail.com/books...rticle1432422/
From review:
"His overall message, however, is serious and alarming, as the title suggests: Leave Wall Street financiers and their international confreres unsupervised, and they'll make themselves enormously wealthy while pulling down around them the very edifice that made it possible.
They did this, Lanchester explains, by creating money out of nothing. He is remarkably precise on the date and incident that launched this debacle. It began, he points out, with a disaster of a very different kind: the oil spill of the Exxon Valdez in 1989, forcing Exxon to ask its bank, J.P. Morgan, for a $5-billion line of credit to cover potential damages. Unwilling to tie up that many greenbacks, which would eat into the bank's capital reserves and reduce its lending power, the bright lights at Morgan created a new animal for the financial menagerie, a voracious little beast called a credit default swap, or CDS, essentially an insurance agreement passed to anyone who cared to assume the risk.
Morgan persuaded the European Bank for Reconstruction and Development to adopt the CDS, paying the EBRD to take the beast off its hands. If Exxon needed the $5-billion, the EBRD would provide the cash. If Exxon didn't need it, the EBRD pocketed a fee from Morgan, whose capital reserves remained untapped. Everybody wins! Light bulbs went on in bank boardrooms around the world with the realization that CDSs were derivatives, which can be bought and sold like bonds or common shares"
Typical of his mindset to have run to ground the origin of CDS.
I'll post a thumbs up or down after I've read it (and you can discount that as you feel appropriate.)
John Lanchester wrote a brilliant piece in the London Review of Books that I return to once in a while, partially just for a good laugh:
http://www.lrb.co.uk/v31/n10/john-la...r/its-finished
"All of this makes RBS’s corporate report for 2007, published just weeks before the bank had to go back to the markets for more capital, a document of unusual interest. Northrop Frye somewhere defines ‘irony’ as involving a state of affairs in which words have a different meaning from their apparent sense. This can be achieved by the audience’s knowing something the speaker doesn’t: so the speaker is saying one thing but we are understanding another. The RBS corporate report is like that. (So are their slogans: ‘Make it happen.’ Make what happen? A £100 billion tab for the taxpayer?) The section on corporate citizenship at the beginning is particularly good value. The firm is involved in plans to increase general levels of financial education. ‘When people have been educated about money and how to work with financial services firms they are more likely to make the right decisions and to avoid difficulties.’ That’s true, but you can also just rob post offices. ‘RBS is a responsible company. We carry out rigorous research so that we can be confident we know the issues that are most important to our stakeholders and we take practical steps to respond to what they tell us. Then occasionally, we blow all that shit off, fire up some crystal meth, and throw money around with such crazed abandon that it helps destroy the public finances of the world’s fifth biggest economy.’ See if you can guess which of those sentences is not in the report."
Anyway, he's just come out with "I.O.U.: Why Everyone Owes Everyone and No One Can Pay."
I'm going to trundle down to a bookstore tomorrow and buy it but here's an early review that shows some promise:
http://www.theglobeandmail.com/books...rticle1432422/
From review:
"His overall message, however, is serious and alarming, as the title suggests: Leave Wall Street financiers and their international confreres unsupervised, and they'll make themselves enormously wealthy while pulling down around them the very edifice that made it possible.
They did this, Lanchester explains, by creating money out of nothing. He is remarkably precise on the date and incident that launched this debacle. It began, he points out, with a disaster of a very different kind: the oil spill of the Exxon Valdez in 1989, forcing Exxon to ask its bank, J.P. Morgan, for a $5-billion line of credit to cover potential damages. Unwilling to tie up that many greenbacks, which would eat into the bank's capital reserves and reduce its lending power, the bright lights at Morgan created a new animal for the financial menagerie, a voracious little beast called a credit default swap, or CDS, essentially an insurance agreement passed to anyone who cared to assume the risk.
Morgan persuaded the European Bank for Reconstruction and Development to adopt the CDS, paying the EBRD to take the beast off its hands. If Exxon needed the $5-billion, the EBRD would provide the cash. If Exxon didn't need it, the EBRD pocketed a fee from Morgan, whose capital reserves remained untapped. Everybody wins! Light bulbs went on in bank boardrooms around the world with the realization that CDSs were derivatives, which can be bought and sold like bonds or common shares"
Typical of his mindset to have run to ground the origin of CDS.
I'll post a thumbs up or down after I've read it (and you can discount that as you feel appropriate.)
![Laughing](https://www.itulip.com/forums/core/images/smilies/laughing.gif)
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