tag:blogger.com,1999:blog-4056375833559530300.post7881657164611585627..comments2023-07-19T07:30:39.140-04:00Comments on Dialectics of Finance: The Goldman Case – 3: Recapping CDOsNasser Saberhttp://www.blogger.com/profile/15326426997935270604noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4056375833559530300.post-24626710405400209462010-06-30T00:46:10.003-04:002010-06-30T00:46:10.003-04:00Thomas,
I just read the article. Lorenzo Bini Sma...Thomas,<br /><br />I just read the article. Lorenzo Bini Smaghi has just discovered some of the intricacies of the international banking which he is proudly sharing with his audience. But what is he saying?<br /><br />1. "Government bonds have become a kind of currency that is crucial to institutions’ dealings with each other."<br /><br />2. "In the last 30 years, banks have drawn more and more of their funding from so-called securitization, packaging loans into securities that could be traded on open markets."<br /><br />3. The volume of interbank lending using such collateral— known as “repos” — is big, Mr. Bini Smaghi said, though there is a lack of data on how big. It is crucial to functioning of the banking system.<br /><br />Etc., Etc. The man is saying nothing. He is describing what every competent operations manager in a New York bank knows. <br /><br />The question before us is: why all this is taking place -- or has taken place? That is, why things are the way they are. It is answer to that question that separates men from the boys, so to speak.<br /><br />I have covered securitization, government bonds and repos in several places on this blog. Read part 9 of the "Anatomy of a Crisis, for example at http://dialecticsoffinance.blogspot.com/2008/04/anatomy-of-crisis-credit-woes-of-summer.html for a comparison of explaining why repo trading is so critical to banking vs. simply saying so.<br /><br />RgrdsNasser Saberhttps://www.blogger.com/profile/15326426997935270604noreply@blogger.comtag:blogger.com,1999:blog-4056375833559530300.post-495706688668642632010-06-16T09:42:35.485-04:002010-06-16T09:42:35.485-04:00Not directly to this article, but I think this art...Not directly to this article, but I think this article in the NYT touches upon issues you are also dealing with:<br /><br />http://economix.blogs.nytimes.com/2010/06/15/government-bonds-and-the-financial-crisis/?ref=economy<br /><br />Regards,<br />ThomasThomas GERhttps://www.blogger.com/profile/10054538326537303738noreply@blogger.com