In case you wondered, they are just as dumb, but their mistakes are kinda sorta BIGGER
So, you read the Consumer Reports, and the Newegg Customer reviews, and you felt confident and bought that $450 LED/LCD and the picture sucks.
You due diligence effort was commensurate in time with the risk you took
So after Lehman croaked (was allowed to croak), banks AROUND THE WORLD changed their rules on how much liquid assets they kept around, and regulators insisted that these ZERO risk assets be increased. TARP and STIM I funneled huge amounts of FEDPRINTSCRIPT into them here and overseas, and not too much came back out.
Now, however, we find out courtesy of CNBC just what these assets are which a ZERO RISK LIQUID (I always thought this meant CASH or GOLD-DIAMONDS at worst)…NOPE…
GREEK BONDS?
YUP.
Western nation govt bonds were considered ZERO RISK LIQUID ASSET reserves for banks like Goldman-Sachs, BofA, Credit Suisee, Agricole, and Deutsche Bankes, etc
When regulators drew up the Basel I capital adequacy framework in the 1980s, for example, they gave western sovereign bonds a “zero” risk weighting, in terms of how capital is calculated. This was subsequently modified in Basel II, to give banks some theoretical discretion to raise reserves against sovereign risk. In practice, this zero-risk weighting policy has prevailed. In some senses it has been actually reinforced in the past five years because regulators have demanded that banks raise their holdings of liquid, safe assets, following that subprime turmoil. Those “safe” assets have been – you guessed it – mostly government bonds.
The settlement is that the non-default default will loan more money to nations like Greece so they can pay $.50 on the dollar, for the loans they already have including the principle value
Can’t anyone learn anything?
Only cash is zero risk.
DUH. You didn’t loan the frickin money out anyway, so where is the cash? Greek Bonds? More leverage?
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