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Bankster of the Day

Bloomberg:

As the sun streamed through the glass ceiling of London’s 40-story “Gherkin” tower in May 2007, Thomas Jasper raised his champagne glass.

Almost 25 years after the former Salomon Brothers Inc. banker transformed the derivatives market into a trillion-dollar industry, his latest venture, Primus Guaranty Ltd., was poised to make unprecedented profits.

“To wider spreads,” Jasper, Primus’s chief executive officer, said as he hoisted his glass to the crowd in the bar, predicting his firm could increase prices for the credit-default swaps it sold to banks protecting corporate debt as investors became nervous over growing losses on subprime mortgages.

Primus shares have fallen 82 percent since that evening. ...

The credit swaps market isn’t the cause of the meltdown, Jasper, 60, said in an interview in his Midtown Manhattan office, on the 23rd floor of the building that also houses the derivative-industry association he co-founded.

“The issues that you had, that we’re all living with right now, are issues of bad underwriting and probably a regulatory framework that couldn’t keep track of where the risk was,” he said.

I thought we were paying the banksters the big bucks because they knew how to manage risk. Did I miss the memo?

And if we're not paying the banksters to manage risk, what are we paying them for? Surely it's not all down to simple extortion and blackmail, right?

NOTE Why don't we just turn the banks into regulated public utilities? Who really needs more than mortgages, car loans, and student loans, really? Borrow at 2%, lend at 3%, on the first tee by 4:00. What's wrong with that? If these guys want to gamble, let them do it with their own money, and not our houses and our retirement funds.

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