10/20/2011

The Birth of the Speculator?

The time period featured here is most certainly not the birth of the speculator, but anyway he does interview some interesting people.











4 comments:

TeaGreedy said...

Think you might be missing the final episode, part 7, found it on YouTube, under a different name for some reason... not a bad documentary but I don't like the way they frame it as if the key players "forgot" about the important elements of risk management.

I think they were pretty smart.. floating around in there yachts in Cannes right now, few hundred million in the bank for a few years graft.. what do they care if AIG is now falling flat on it's ass or the countless other big names.. watch inside job by Matt Damon, according to him many of these top brass made an absolute killing in the 4 years leading up to the eventual collapse and I'm inclined to believe it.. none of them were ever taken to book, made to pay back the huge sums they reaped during those times which was on a basis of in my opinion false accounting, clever false accounting but still false accounting done in a legal way.. if you see the latest article on the web about Dexia and the loans they put out to a subsidiary to effectively buy there own shares and increase there capital base in order to manipulate how the books looked.. that sort of stuff going on is just amazing to me, it is down right fraud.. not unlike these so called "complex derivatives", the fact the ratings agencies were stamping those securities as AAA is because they were taking there fair share in cuts, in my opinion they all knew and still know exactly what they were/are doing.. the system is very corrupt as it stands at the moment right up to the top, that is evidenced by the fact that from my knowledge no-one has been taken to task for what's gone on.

Solfest said...

Post the link for part 7 please.

I've watched Inside Job it's pretty good.

The bottom line for me is you are allowed to make as much money as you can in business, and, if the risks you take to make that money go against you, YOU GO BROKE.

Banks included.

If the government deemed them "to big to fail" then they should have been nationalized or forced to break up like Bell and Standard Oil.

You can't have private profits and socialized losses.

TeaGreedy said...

Here you go

http://www.youtube.com/watch?v=KCgkJxtxeLc

Agree with what you say but I think there are also some inherent structural problems with capitalism as it stands at the moment in that the outcome of the individuals success no longer necessarily translates to the greater well being to others involved.. like in this documentary this guy built up AIG over many years, his future and all others in that business's fortunes were tied together along with the fortunes of the business itself and so by him seeking profit as an individual the trickle down effect comes into play and over years, many more people reaped benefits of jobs etc. These days some of the smart players have figured out how to make the same amount of money by doing much less work in a much shorter period of time while still staying within the law or at times getting the law changed to suit there own purpose..
at the end of the day they are still driven by the same motive, to take risk and make a profit, they are just doing it in a way that no longer benefits the collective and would be considered morally acceptable by some in society.

I honestly don't think AIG went to the wall because thousands upon thousands of their staff suddenly began acting recklessly, more likely an influential minority from the inside figured ah yes we can create a bit of this a bit of that, it'll look great in the annual report, we'll get some nice fat bonuses, in 5 years time when everyone else figures out what is going on we'll be off eating out the inside of the next piece of cheese.. there is nothing really to keep these guys in check any more.

Solfest said...

Thanks TG, I'm not sure that video is from the same series as the ones I posted. There are others called Broken Banks along with the link you posted.

I think there is something to keep them in check.

Bankruptcy.

If you remove that, as governments did for the banks, then you are not allowing capitalism to work the way is supposed to work.

Anyway tis all very interesting.

The word that stood out for me in the link you posted was overconfidence. This applies to all traders as just when you think you've got it all figured out you get smacked.

And the financial industry most certainly got smacked.

Well some of them did, lots of little banks in the USA went under and the system in place to facilitate that seems to work. It was just the "to big to fail" ones (other than Lehman and Bear Stearns) that didn't get the outcome they deserved.

So now I'm just repeating myself.

Make money and smile, lose money go bankrupt.

It's how the system works. If you mess with the system you make things worse for all in the long run.