and the geeks shall inherit…
this mess. well folks, the verdict is coming in and it isn’t looking good for the smart guys. apparently, the back office smart guys that were hired by wall street to develop a set of complex derivatives* of the swap**-kind — an idea they thought at the time was brilliant because it would minimize risk and at the same time, make them richer than they could ever imagine–were wrong. i’m simply not capable of writing an informative summary about these transactions so here is a good story from last night’s 60 minutes.
i heard that last week when the you-know-what hit the fan, there was a run on duct tape. to exact revenge, the bankers are going to go on a serious bun-taping mission*** to punish any geek still showing up for work.
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* derivatives are financial instruments whose values depend on the value of other underlying financial instruments. the main types of derivatives are futures, forwards, options, and swapsand they are used to is to reduce risk for one party. The diverse range of potential underlying assets and pay-off alternatives leads to a wide range of derivatives contracts available to be traded in the market.
** a swap is a derivative in which two counterparties agree to exchange one stream of cash flows against another stream. the streams are called the legs of the swap.
*** come on, that is an easy movie reference. a facebook bakery treat or super-poke high-five goes to the first identifier.
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um, ouch.
but also, as stockholders (via 401k or brokerage accounts) don’t we own some of this? i believe carl icahn (the shark of all sharks) has started a shareholders “union”/alliance if you will called “united shareholders of america”. check it out here:
http://www.icahnreport.com/report/2008/10/join-the-united.html
Should Wall Street CEOs through to the $45k interns be strapped to the bull’s horns (bottom first of course)?
I would be in favor of seeing such a scene on YouTube or even posted here on sacredbird.