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Old 1st October 2008, 15:02   #31
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Quote:
Originally Posted by phamilyman View Post
Tsk bhai,

I am using the word greed. The reason for the meltdown is over -leverage, which is driven by greed.

And for your information, the models, and risk analysis for all banks are typically run by mathematics PhDs - would suggest getting your facts right. To assume that engineering graduates are creating institutions while management grads are doing something wrong is callous and myopic at best.

All you are prolly reacting is news items about Bschool placements in i-banks.


Any further doubts? 7/15 with MANY more BA!
And frankly, this gem here:
is like saying because CERTAIN drugs (Thalidomide, anyone?) have killed/maimed people, then the biotechnology schools are to blame.

Honestly, that's completely devoid of any semblance of logic. I still think this thread needs to be cleaned up, given the comparatively harmless posts which have been deleted in the past in the name of chatter and OT.
.
Way to go ! WIMWIAN ! WIMWI ka tempo high hai.

This is to specifics with the US Sub prime market, Sub prime means below par. Par in the Sub prime crisis means refinancing mortgages given to people with doubtful payment histories. As you may or may not be aware there are three major Credit rating bureaus across the united states catering to US residents with Social security Numbers (i say residents, not citizen).

Now very simply put if they had to make a successful bid towards refinancing sub prime mortgages, they should have made a rider on the quality of mortgage depending upon the credit rating of the borrower.

Had the grades of the lenders been classified in the first place, no one would have been holding lemons. Our RBI for that matter is far more mature and experienced despite having only a 50+ year existence.

First and foremost, would YOU buy a mortgage (refinance it) if you knew it originated from a bad borrower ?

I would not.

Why did Lehman ? It was a growing fad to trade in Sub prime mortgages and back it up with bonds funding the purchase of sub prime mortgages ?

There are banks who have taken money from the public by way of bonds to help fund these so called "sub prime" mortgages.

I guess this cost Lehman seriously, had they been more prudent like HSBC who hedges their risk across markets, it would have made sense.

Why did Wachovia sell out ? Why did Merill Lynch who is primarily a primary and secondary securities marketer sell out ?

Doesn't make sense without a detailed analysis.

Buy a lemon, knowing its a lemon, don't cry later.

Cheers
MM

Last edited by mmmjgm : 1st October 2008 at 15:14.
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Old 10th October 2008, 13:20   #32
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Read this - Great Depression - Wikipedia, the free encyclopedia and you'll find many similarities with the current situation.

It's scary, then it ended in 10 years, how long will take to end now?

A quote from this article -

Quote:
Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.
\N
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Old 10th October 2008, 14:36   #33
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Excellent video on current crisis:



EDIT : Another one:


Last edited by NetfreakBombay : 10th October 2008 at 14:55.
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Old 10th October 2008, 18:10   #34
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Another funny take!
The Great Wall Street Meltdown Part 1 at Random Thoughts of a Demented Mind
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Old 10th October 2008, 20:17   #35
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How many WIMWIANs do we have here? I am one.

I do however agree in principle with what tsk has said. It is our over-reliance on all the Black-Scholes / derivative / exotic rubbish that has brought about this mess. But then we learn. I don't know if you guys remember LTCM. I think at-least the WIMWIANs who took the MFI course (TT Ram Mohan) may know what I am talking about.
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Old 11th October 2008, 16:05   #36
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Quote:
Originally Posted by typeOnegative View Post
I don't know if you guys remember LTCM.
Most people would not know anything about it.

People still think Harshad Mehta's scandal was a stock market scam (Have hard time explaining that it was actually a money market scam).
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Old 11th October 2008, 17:22   #37
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Default Credit Crunch for Dummies

Here's a description of the current credit crisis in very simple terms:

Gulfnews: Print Friendly Version
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Old 11th October 2008, 23:47   #38
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A graphical story version of the same:
Subprime Explained - Google Docs

apologies if its a double post.

I didnt have TTR, but LTCM was covered in IPM, or was it form?

Last edited by phamilyman : 11th October 2008 at 23:48.
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Old 12th October 2008, 13:33   #39
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Quote:
Originally Posted by phamilyman View Post
I didnt have TTR, but LTCM was covered in IPM, or was it form?
Never took IPM or FORM. I had it in MFI. Heh heh. I slept during the bidding.
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Old 17th October 2008, 11:39   #40
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THINK ABOUT IT

If you had purchased $1000.00 of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have $16.50 left of the original $1000.

With WorldCom, you would have less than $5.00 left.

If you had purchased $1000.00 of Delta Air Lines stock you would have $49.00 left.

If you had purchased United Airlines, you would have nothing left.

But, if you had purchased $1000.00 worth of beer one year ago, drank all the beer, and then turned in the cans for recycling, you would have $214.00. Based on the above, the best current investment advice is to drink heavily and recycle. This is called the 401-Keg Plan.

Think about it!
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Old 17th October 2008, 11:56   #41
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Quote:
Originally Posted by Steeroid View Post
THINK ABOUT IT

If you had purchased $1000.00 of Nortel stock one year ago, it would now be worth $49.00.

With Enron, you would have $16.50 left of the original $1000.

With WorldCom, you would have less than $5.00 left.

If you had purchased $1000.00 of Delta Air Lines stock you would have $49.00 left.

If you had purchased United Airlines, you would have nothing left.

But, if you had purchased $1000.00 worth of beer one year ago, drank all the beer, and then turned in the cans for recycling, you would have $214.00. Based on the above, the best current investment advice is to drink heavily and recycle. This is called the 401-Keg Plan.

Think about it!
I think this has been posted in the joke thread. Good that you did not post it there, otherwise you know what would have happened
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Old 17th October 2008, 12:07   #42
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Ok guys, here's what happened (in a lighter vein):

Once upon a time, in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each.The villagers seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort.

He further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now buy on behalf of him.
I n the absence of the man, the assistant told the villagers. "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each." The villagers rounded up with all their savings and bought all the monkeys.
Then they never saw the man nor his assistant, only monkeys everywhere!
Now you have a better understanding of how the stock market works.
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Old 17th October 2008, 12:08   #43
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One more:-

Post Lehman brothers fiasco, this quote is getting popular:

"There are two sides to a Balance Sheet - Left & the Right (Liabilities and Assets respectively). On the Left side there is nothing right. and on the right side there is nothing left”
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Old 17th October 2008, 14:06   #44
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Read this link:

http://www.imf.org/external/pubs/ft/...f/chapter2.pdf
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Old 17th October 2008, 14:22   #45
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Quote:
Economic Bubbles - Why they form and why they burst ?
basically corruption in managing an economy cause bubbles and bursts.

the world economy is also currently being managed by very corrupt handlers.
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