Posts Tagged ‘business’

If derivatives are  as dangerous as the commentators suggest, why are  they permitted? If they are  such a threat to the financial system, why  does the size of derivatives bets  continue to grow? The answers have to  do with several myths the big bank derivatives  players have created.  These myths are false and distract interested parties  from doing what  needs to be done to ban derivatives. It’s time to demolish  these myths  once and for all.

It is the commercial banks that have created the Bubble Economy’s inflation, from North America to Europe. They have recklessly lent mortgage credit and other credit far beyond the ability of domestic economies to pay. A real central bank can create credit on its electronic keyboards just as easily as commercial banks can do. But central banks do not create credit for speculative purposes. They do not make junk mortgages based on “liars’ loans” (the liars are the banks, not the borrowers), based on fictitious evaluations by crooked appraisers, and sold fraudulently to investment banks to package and sell to gullible Europeans, pension funds and other customers.

Regulators on both sides of the Atlantic failed to act on clear warnings that the Libor interest rate was being falsely reported by banks during the financial crisis, it emerged last night.


A cache of documents released yesterday by the New York Federal Reserve showed that US officials had evidence from April 2008 that Barclays was knowingly posting false reports about the rate at which it could borrow in order to assuage market concerns about its solvency.–and-no-one-acted-7942451.html