The Club of the five.
For my generation, "The Club of the five" (The Breakfast Club) was one of the most interesting comedietas youth and commented upon in the recesses of the school.
This was a group of five students, each more peculiar and distinct, forced to spend 8 hours in the library of the institute.
In a way intended to show the typical fears of the 80 adolescents.
23 years have passed since the premiere of that film, and now the club of five, I am afraid that has another meaning entirely different and that instead of showing the typical fears of our century, the produce. This is the club that has mounted the shed and subsequent subprime mortgage crisis that affects us at this time. The film would start exactly like this:
(Voice-over)
Representatives of five of the major investment banks on Wall Street came together on a table one night in February nearly three years ago. Their conversations, while on the table had to order Chinese food (*), ended up in the perfect formula for the collapse of the housing market in the United States ...(*) According to Cinco Dias, instead of Chinese food, the menu was sushi.
And see who manages the threads in this world, gather 5 big fish (Deutsche Bank, Goldman Sachs, Citigroup, JPMorgan and Bear Stearns.) Invent a new financial instrument, it stuffs and then lead us to bankruptcy. It's that easy.
So in Five Days, we summarize the movie, with final included:
- Flexible credit. For a start, much of the crisis is explained by the peculiarities of the American mortgage system, which could get a loan without having to justify salary, employment or any asset class.
- Massive debt. The combination of sleeve broadband in the granting of credits and low interest rates led to a massive debt to the point that 25% of new mortgages are subprime character.
- Drought credit. Batacazo The major impact of the subprime bonds is not of the losses arising from a failed investment, but the drought of liquidity in the interbank system and tightened, to bull past, the conditions for access to a credit . The banks require very high premiums when it comes to lending money to other entities, thus prolonging the duration of the crisis.
Mostly, what these guys play, is the dismissal, but yesterday he commented that citigroup we recommended buying shares despite the uncertainty in the market today comes Credi Suisse stock market panic by announcing in 2008 by the economic slowdown. And part of a premise that is true and good is that the global economy has experienced over the past four years as strong an expansion that is unparalleled in almost 40 years. So a small and controlled crisis, it could be beneficial to purge the market of certain kinds of speculators.
Ya see, everything is very clear and we only have a doubt about the gestation of this crisis. ¿Ate lunch Japan or China?
PD: Put the batteries, which the website of the Tax Agency launches the simulator Income Tax 2007
PD 2 (read reviews in zone): The ECB now offers unlimited liquidity far below the interbank rate. The monetary institution announced yesterday that it will address all requests for cash to make the bank at an interest rate of 4.21% or higher (well below the Euribor)
Written by Carlos Lopez on December 18, 2007 with 190 comments
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