6 Dec 2008
These are doing the rounds in the city at present, enjoy!
NEW STOCK MARKET TERMS:
CEO --Chief Embezzlement Officer.
CFO -- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.
BROKER -- What my financial advisor has made me.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
CASH FLOW-- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @$240 per share.
INSTITUTIONAL INVESTOR -- Former investor who's now locked up in a nuthouse.
PROFIT -- An archaic word no longer in use.
More seriously if you want to understand the derivatives meltdown and current wider crisis..have a look at 'the crumbling wall of money'.
Understanding how the current "financial 9/11" came about -- beyond simply blaming "greed and fear" -- may cast light on the deeper structural changes that are needed if history is not to repeat itself.
A starting point for analysis is the largely unregulated "shadow banking system" that financial entrepreneurs have created over the past 30 years, not only to make huge profits for themselves but also to circumvent regulation and to offload risk onto others throughout the financial system. The system relied on the creative use of new financial instruments, particularly derivatives, that allowed financiers to generate easy credit by taking high risk bets while dumping the risks elsewhere.
As a result, they created "a wall of money" that fuelled a boom in corporate mergers and acquisitions across the United States and Europe, concentrating economic power in the process. Easy credit provided huge sums of capital for companies involved in mining, biofuels, private health care, water supply, infrastructure and forestry to expand their activities. When the bets went wrong, however, the pyramid of deals began tumbling down -- and it is the public that will continue to carry the costs for many years to come.
Posted by Derek Wall at 7:03 pm