Thanks to MC at the Post for sending this along. Click for a bigger view
Oh, it all seems so obvious now doesn't it?
Bottom line: Leverage sucks on the way down. Really, really sucks.
April 02, 2008
Washington Post cartoon on the leveraged Ponzi Scheme mortgage meltdown - "How Debt Bites Back"
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10 comments:
Even with a cute looking cartoon it's hard to make sense of. My head hurts. Thank god my iPhone works.
Not True - the panel with the FED is missing, everything is good.
It says nothing on the massive fraud that went on - and everyone was in on it - as they were all making big bucks...
Marky Mark
You left out the seventh panel of the cartoon, which shows the taxpayer bailing out these two bozos.
As well as the eigth panel which shows them laughing their merry way to the bank.
Why did the strip leave out when all this began?
Could it be as far back as 1990?
Oh no.....
That's what happens when you have people who majored in philosophy and art running the banks and hedge funds. You see, the bright minds at the top wanted people who could think "outside the box" and create new products to make money. Of course, these people didn't have a clue about finance, except for the required basic economics course they took as a freshman.
It's interesting to compare that to the "recessionary spiral" graphic that's on iTulip.com (http://tinyurl.com/3x9faq) and see how the country's problems are hitting at the "high end" (banks realizing they are hosed) and the "low end" (Joe Public taking it in the rear because of high energy prices and stagnant wages).
Where is the panel with the President of the Free World trying to get off the stage through a locked door (tried the door twice, just in case it wasn't really locked the first time...)?
George W. Bush - laughing stock of the free world. Worst Ever. Period.
So now that Bush/Cheney have outsourced the U.S. Treasury to the Federal Reserve (a private bank), do you think they will be getting kick backs from Bernanke like they do from KBR, Halliburton and Blackwater?
What a sweet deal !!!
That cartoon is great. I was able to understand for the first time about Carlyle and the 32:1 and margin calls. Thanks for posting it. Maybe I'm a dummy for not quite getting it without the cartoon version but thanks for explaining it in simpler terms.
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