“What type of reform? First and for all, the packaging of different debts in impossible to untangle CDOs ld be outlawed. These products are financial time-bombs waiting to explode for the real economy, not only in the United States, but around the world. Second, CDS insurance products should be issued only against insurable securities and not issued as casino chips in values much larger than the value of the insured securities (i.e. no so-called naked CDSs). In order words, the entire innovation of securitization finance has to be reviewed and reigned in before it does further damage. These two reforms could be implemented immediately if politicians really understood the problems or if they were not in the banks’ pockets.”
With Europe under attack by precisely these weapons the pressing question is whether they respond decisively.
Prof. Rodrigue Trremblay
Global Research
20th March, 2010
I have spent some fifty years studying economic cycles and teaching international finance, but I had never seen the likes of what we witnessed and experienced over the last three years. That’s because such financial crises seem to happen 60 to 75 years apart.
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In These New Times 