This explains why the banking system is in such bad shape.
(Bloomberg) -- The value of global financial assets including stocks, bonds and currencies probably fell by more than $50 trillion in 2008, equivalent to a year of world gross domestic product, according to an Asian Development Bank report.Asia excluding Japan probably lost about $9.6 trillion, while the Latin American region saw the value of financial assets drop by about $2.1 trillion, said Claudio Loser, a former International Monetary Fund director and the author of the report that was commissioned by the ADB. The report didn’t give a breakdown of asset declines in other regions.
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The global economy is likely to shrink for the first time since World War II, and trade will decline by the most in 80 years, the World Bank said yesterday. Its assessment is more pessimistic than an IMF report in January predicting 0.5 percent global growth this year.Developing nations will bear the brunt of the contraction and they will face a shortfall of between $270 billion and $700 billion to pay for imports and service debts, the Washington- based World Bank said.
“This crisis is the first truly universal one in the history of humanity,” former IMF Managing Director Michel Camdessus said at an ADB forum in Manila today. “No country escapes from it. It has not yet bottomed out.”
Amazing how destructive a financial system can be when it is totally unregulated.
wealth or fictional wealth?
Seriously, little electronic possibilities of derivatives or real wealth? I'm starting to believe these two need to be separated out.
Am I alone in finding this great global disaster completely man made, based on bad mathematics, bad models and fictional value derived from other fictional value to be absurd...
it's like horse racing where the real race is betting on the betters and in terms of the horses....well, they almost do not have to even exist.
Fictional wealth
This is definitely a man made crisis. But why are we supporting this "false wealth"?
It is time to start looking for alternatives our current financial system.
RebelCapitalist.com - Financial Information for the Rest of Us.
Is not all wealth fictional?
Unless you're talking about some future economic system based on the laws of physics, all wealth is indeed fictional, based on the legal fiction of private property to begin with.
The entire system is an invention, and is therefore fictional.
Some parts of it are just more fraudulent than other parts.
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Moral hazards would not exist in a system designed to eliminate fraud.
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Maximum jobs, not maximum profits.
Unacknowledged Legality?
Note, Jesus said, "Render unto Cesar what is Cesar's." He did not say, "Fail to honor it and it's worthless." Fact is, all legal tender is a legal fiction. Strawberry Fields aside, what is real, except what is required?:-)
CDO vs CDO^2
Or maybe the actual debt vs CDO. Of course it's fictional, but there's still a difference between using money as valuation for something real (house, bushel of wheat, brick of metal) and using it as valuation for something fictional (money).
how about
doesn't translate in any reality as a unit of value or exchange medium established.
Real v. Nominal
Apparently, now the nomenclature suggests a distinction between absolute and relative value. On the one hand your home has a real utility value...on the other hand you pay for it with money/currency, which has a fluctuating value. Is there, perhaps, a better, more intelligent way?