tag:blogger.com,1999:blog-6616959642391988608.post4293136832422500668..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Industrial activity enjoys strong growth worldwideScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6616959642391988608.post-82646336747059812252011-04-15T14:54:31.124-07:002011-04-15T14:54:31.124-07:00William--
Interesting. I think what worries me is...William--<br /><br />Interesting. I think what worries me is heavy, heavy leverage (100-to-1, ala Long-Term Capital management) married to complicated financial derivatives.<br /><br />We also have the problem of investors not knowing what a complicated security is worth--ala CMBS, or CDOs--during periods of financial tumult, and that (when married to leverage and derivatives) also seems to lead Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-26728822738856164012011-04-15T10:24:25.417-07:002011-04-15T10:24:25.417-07:00Buffet referred to derivatives as “financial weapo...Buffet referred to derivatives as “financial weapons of mass destruction” because of Berkshire's 4 years struggle to untangle itself of General REs $400 Billion notional value of contracts. They lost $100 Million getting out of them. But Buffet has personally authorized put options on equity market indexes. See the following from the NYTs, 29 April 2010 . The link is below.<br /><br />"Williamhttps://www.blogger.com/profile/04418491109912775561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-3119460501799820802011-04-15T09:39:38.580-07:002011-04-15T09:39:38.580-07:00Boy, those are sickening plunges in 2008-9. No wo...Boy, those are sickening plunges in 2008-9. No wonder equity investors are chary. <br /><br />I would like to see, with clarity, a system not prone to near-complete financial collapse. <br /><br />I have not heard anyone call for a free-market solution--that is, wipe out not only Fannie and Freddie, but the FDIC. <br /><br />That leaves us at least with government umbrella or regulatory solutionBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com