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Freefall by Joseph Stiglitz – A Book Review

I must admit I was a bit impatient when I saw the book being postponed for publishing for February 2010. Not only because “Freefall – America, Free Markets, and the Sinking of the World Economy” by the famous Joseph Stiglitz is a book which promissed to demistify the current prolonged global crisis in a more academic manner (read – with some stone hard economic analysis behind, not the small talk books written usually on the topic). I was expecting it with impatience also because Stiglitz is a non-compromises author – he does not fiddle around the topics, but shoots and moves ahead. And my expetations were actually a bit exceeded.
So, an “Freefall” is an economics book about the recent global crisis and how it spread from US to the rest of the world. I think that besides me, the first one thousand copies were bought by the following characters:
– president Obama and his financial advisors;
– ex- double president Bush, Alan Greenspan and all the economic advisors who accompanied him and
– the bankers who invented lots of arguments to get trillions of dollars in cheap loans from the US government to make even more profits.Read More »Freefall by Joseph Stiglitz – A Book Review

What Means the Goldman Sachs Fraud Charge for Other Banking Stocks?

I think I said this before, here on banking is a trust business. And when the trust is lost, you can bet that half of your clients are almost gone for the emergency exit.

The reason for this is quite simple – in banking a customer buys your ability to deliver a promise. He/she wants your financing for the long term (mostly desirable for the seller), your ability to generate revenue for the customer, your superior investment yields.  It is all about the money.

In their book “The Trusted Advisor”, the Harvard professors who authored it argued that a counselor of any king must strive in essence to do 2 things:Read More »What Means the Goldman Sachs Fraud Charge for Other Banking Stocks?

The End of an Investments Era

 Until last year it was normal for the traders to practice short selling (defined as selling share which you do not own but you will supply in a maximum of a period established by contract, obviously by buying them later). Or to sell the mortgages packed in thousands for a hefty price based on average yields. Or to loan to an Americans family so that they were supposed to pay in installments in one year more than they earned. Or, as was mentioning some time ago, to value higher and higher the shares of the investment banks, which measured their own assets.Read More »The End of an Investments Era