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As I wrote years ago in FINANCIAL CRISIS PSYCHOPATS IN ACTION in Bloomberg a little masterpiece was released, reported by the Washington Blog in which it was claimed that psychopaths caused the financial crisis and that they will still do so unless they are removed from power.
You removed yourself from power by hook or by crook!
These days I could no longer stop laughing listening and reading the trash comments from the media after the financial world, the collapse on Thursday was due to the discovery that the prices of Tesla and Apple and other miscellaneous amenities were not linked to the fundamentals. But they had risen thanks to Soft Bank’s multi-million dollar bet, they said to themselves like this, someone noticed that the prices had nothing to do with the fundamentals, you idiots!
What happened?
The role of the call options market supported by Softbank purchases and the savers who trade them for free on Robinhood in the Nasdaq rise from March. https://t.co/8gjN1CCjXU
– Marco Liera (@LieraMarco) September 6, 2020
Findings about Softbank’s leading role in derivatives speculation that caused tech stock prices to rise and then crash on Wall Street have knocked out the Japanese giant’s shares. At the end of the trade, the second largest publicly traded company on the Nikkei index showed a drop of more than 7 percentage points. In terms of lost capitalization, we are talking about almost $ 9 billion.
The white whale
According to rumors, Soft Bank would have launched risky speculation on derivatives by focusing on the rise of the technology sector. In other words, it would have implemented substantial purchases of call options (securities that give the right to buy securities in the future at a specific price) on the Nasdaq. Doing so would have forced the brokers who sold those options to protect themselves by buying the same shares on the market. A move that really contributed to his rise. However, as quickly as it was created, the house of cards collapsed last week when the Nasdaq abruptly reversed its course, losing 5 percent in a single session.
Who are we talking about?
From a handful of fans gambling with the billions that some fool or naive puts at their disposal on a daily basis, following the sensational flop of WeWork and partly Uber and a nuanced share in the collapse of the US money market in September 2019, These psychopaths have made a bet that has destabilized the market in response to the response of shareholders who have liquidated 10 billion in an instant.
As long as these people continue to play rather than invest, the market will be a gas chamber ready to explode at any moment, while surveillance, regulation and central banks sleep.
The “corporate psychopaths” at the helm of our financial institutions are to blame [per la crisi finanziaria]Clive R. Boddy, from Nottingham Business School at Nottingham Trent University, tells us that psychopaths make up the 1 percent of people who, perhaps due to physical factors related to abnormal brain connectivity and lack of awareness, few emotions and inability to have, feelings of sympathy or empathy for others. As a final result, argues the professor in a recent issue of the Journal of Business Ethics, these people are extraordinarily cold, ruthless towards others. others than the majority and therefore are a threat to the companies for which they work and to society ”. Psychopaths take advantage of the relatively chaotic nature of modern society, which includes rapid change, constant renewal, and high turnover of key personnel in companies – circumstances that allow them to rise through a combination of charm and charisma that makes their behavior unique. invisible and makes them look normal until they look like ideal leaders. A stable environment would have made corporate psychopaths visible and identifiable, identifiable as undesirable managers due to their selfish and selfish personalities and other ethical flaws. (…) The problem began when these charmers did, in fact, seize power in the major financial institutions … men capable of influencing the moral climate of the entire organization to wield considerable power.
Companies that operate as hedge funds remind me of the good old days of the Great Depression of 29, for those with a modicum of historical memory, supposed companies in which ex-investment bankers with strong propensity to risk, essentially pure psychopaths, were hired. , people who do not mind making disasters, they go to the limit with millionaire bonuses and some idiot who summarizes them always finds it.
Nothing in particular, the problem is trusting people who promise stellar earnings and occasionally panic holes, playing derivatives or illiquid as happened with H20 funds.
Sure, the gamble has worked for now, but a market crash could destroy value far beyond earnings and this worries the Fed as it did in September last year with the money market and rate boom.
Unless …
Former New York Fed Chairman Dudley says Powell shouldn’t mask the aftermath of the trade war: “Trump’s re-election potentially presents a threat to the US and global economy and the Fed. If the goal is the best long-term outcome, then the Fed should consider how decisions affect 2020 ”https://t.co/0rofxUFCak
– John Harwood (@JohnJHarwood) Aug 27, 2019
… The Fed has no interest, as former New York Fed Governor Dudley argued that Trump loses the election, because Trump’s re-election is a danger to the United States of America, he says.
In short, only two months left, just one Fed meeting, and happy birthday to Trump!
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