Wednesday, April 28, 2010

Park: This May Be the Tipping Point, Bailing Out Greece is Throwing Good Money After Bad, CDOs Used to Lie

Danielle Park was on BNN earlier today. She was great. This is a must see.
Some of her points:
  • Truth is finally coming out
  • Greece has a solvency problem, not liquidity
  • Does not have a credible plan
  • Bailing out Greece is throwing good money after bad
  • From GS hearing: the point of CDOs was to lie, to help people, companies and countries to lie about their debt. People, companies and countries wanted the lie to continue, to pretend they wealthier than they are, they overspent, overborrowed, and overlent, at artificially low rates.
  • The Jack in the box is out of the box
  • GS and China breaking down
  • GS was never working for anyone's best interest, only their own;
  • What about the portfolio manager buying packages or garbage and putting them into pensions, What about their obligations - she forgot the rating agencies
  • This has been going on since Enron, 10 years ago
Finally, she says this may be the tipping point. There isn't enough money to bailout out the bad debts of the world. They have to go broke, there has to be a default, and start fresh with new rules that restrict derivatives, accounting measures.

Ms. Park is the author of the great book "Juggling Dynamite", reviewed and recommended here on April 7.

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