If you are new to this blog, you are invited to read first “The Largest Heist in History” which was accepted as evidence and published by the British Parliament, House of Commons, Treasury Committee.

"It is typically characterised by strong, compelling, logic. I loosely use the term 'pyramid selling' to describe the activities of the City but you explain in crystal clear terms why this is so." commented Dr Vincent Cable MP to the author.

This blog demonstrates that:

- the financial system was turned into a pyramid scheme in a technical, legal sense (not just proverbial);

- the current crisis was easily predictable (without any benefit of hindsight) by any competent financier, i.e. with rudimentary knowledge of mathematics, hence avoidable.

It is up to readers to draw their own conclusions. Whether this crisis is a result of a conspiracy to defraud taxpayers, or a massive negligence, or it is just a misfortune, or maybe a Swedish count, Axel Oxenstierna, was right when he said to his son in the 17th century: "Do you not know, my son, with how little wisdom the world is governed?".

Saturday, 20 March 2010

Nothing happened

In his article "Against All Odds", Daniel Gross is trying to prove that, very likely, "AIG might just pay the Fed back" the costs of the bailout. He concludes: "Nobody at Treasury or the Fed is bold enough to predict that taxpayers will ultimately be made whole. Some rough math suggests that final cost to the taxpayers for the AIG debacle could be between $12 billion and $20 billion. Yes, that’s a bitter pill to swallow. But it’s a much smaller pill than we have imagined even a few months ago."

Mr Gross' analysis and arguments are supported by pretty detailed calculations. Yet his "rough math" has the major flaw. It does not take into account the costs of the downturn of the economy caused by the financial crisis in which AIG played a key role. The financial crisis is not really a crisis but, as shown in the seminal article on this blog, a collapse of the pyramid scheme engineered in order to funnel cash from the economy into individuals' hands. The costs of the economic downturn go into trillions of dollars in national budgets’ deficits and far more if we were to add losses of individuals and families that lost their jobs and homes.

The enormity of the current global financial mayhem that will be paid for by generations to come brings a question about a true motivation of publishing articles painting a rather rosy picture as if nothing really has happened.

1 comment:

  1. Very true Greg, the way pundits describe the sums involved, it is as if a billion; if you say it quick enough will sound a small amount, so trivial in fact that you could liken it to the humorous way Les Dawson used to lift the kerbstone to brush the litter away!


    Brian Hull