The Lemon Fool

Remind me if I'm wrong but wasn't the last banking crisis caused in part by them chasing sky-high bonuses? Or were they entirely blameless?

I thought it had more to do with CDO's that were meant to be of a certain standard but we're in fact nothing of the sort. I suppose you could blame rating agencies too.

The bankers might have gained some bonus for selling that rubbish but once if was identified as such, there was a fire sale and those left holding the baby were badly burnt.

A housing collapse in the states was also a factor so maybe blame the realtors too.

Gerry557 wrote:I thought it had more to do with CDO's that were meant to be of a certain standard but we're in fact nothing of the sort.
.

Yes - the world banks and rating agencies believed that parcelling together lots of sub prime loans that would never be repaid somehow mysteriously created loans that were guaranteed to be repaid. And they parcelled and re-parcelled this junk, selling it back and forward to one another, with each party apparently making a profit at each transaction. It took them a long time to realise that this was a pass the parcel game with bombs ready to explode. Lehman Brothers got caught and went bust, then all other banks stopped the flow of (good) loans necessary to oil the world economy, terrified that they may get infected, and banks which relied on short term borrowing to fund long term loans (e.g. Northern Rock) got into deep trouble.
Increased Bonuses for Bankers? Do you think any of them know how to sum probabilities of correlated events? Or do they still imagine that throwing a dice many times increases the probability of a six?

I'd recommend watching/reading 'The Big Short'. Both amusing and frightening at the same time. But we've learnt the lessons of the past, haven't we

Redmires wrote:
I'd recommend watching/reading 'The Big Short'.

Both amusing and frightening at the same time.

That's a great film, but around the topic of the 2007/2008 financial crisis, I actually preferred 'Margin Call' and anyone interested in this period would probably find the two films both very entertaining and very enlightening...

Margin Call - https://www.rogerebert.com/reviews/margin-call-2011

How to watch - https://www.justwatch.com/uk/movie/margin-call

Cheers,

Itsallaguess