tag:blogger.com,1999:blog-4088979.post7474987981295513340..comments2023-10-16T06:06:25.012-04:00Comments on TaoSecurity Blog: Steve Liesman on Inputs vs OutputsRichard Bejtlichhttp://www.blogger.com/profile/13512184196416665417noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4088979.post-53480628328895367342009-05-01T13:16:00.000-04:002009-05-01T13:16:00.000-04:00steve liesman is constantly spinning ! lies almo...steve liesman is constantly spinning ! lies almost everyday about something . and never admits when he is wrong!!!!! he recently told peter schiff that he was wrong and didnt predict this crisis ! is he nuts ? peter has got it right on just about everything . not all but alomost . steve hasnt got anything right ! i think i just jealouse . he should drink the kool-aid with jim cramer ! he actually thinks the economy is getting better and has reached the bottom ! yeah ! keep dreaming ! cnbc = spinning , lies , deceit . cannot be trusted !Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4088979.post-20580449100494998392009-03-07T03:55:00.000-05:002009-03-07T03:55:00.000-05:00It's not a matter of control anymore. We have seen...It's not a matter of control anymore. We have seen controls and additional controls after Enron scandal. We have even experienced controls over controls. <BR/><BR/>I think that the very models on which the business is based upon need a drastic change. It's like going back to the drawing board at the academic level after a crash.<BR/><BR/>I am sure most of business schools must be doing that at the moment i.e. going in search of new models and discarding whatever we learned in the last several decades.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4088979.post-35089244838639532672009-03-06T12:30:00.000-05:002009-03-06T12:30:00.000-05:00actually the Wall St mess is a case in point of wh...actually the Wall St mess is a case in point of why need better controls. The unregulated derivatives market and shoddy accounting led us to where we are today. <BR/><BR/>But hey, don't take it from me (and certainly take anything on CNBC with a heaping dose of salt), instead listen to Warren Buffett and Charlie Munger, call it security, call it controls I dont care what you call it but our systems our unreliable today, we dont have a single system with integrity, we need margins of safety:<BR/><BR/>"The system is almost insanely irresponsible. and what people think are fixes aren't realy fixes. It's so complicated I can't do it justice here - but you can't believe the trillions of dollars involved. You can't believe the complexity. You can't believe how difficult it is to do the accounting. You can't believe how big the incentives are to have wishful thinking about values and wishful thinking about ability to clear.<BR/><BR/>People don't think about the consequences of the consequences. People start by trying to hedge against interest rate changes, which is very difficult and complicated. Then, the hedges make the [reported profits] lumpy. So they use the new derivatives to smooth this. Well, now you've morphed into lying. This turns into a Mad Hatter's Tea Party. This happens to vast, sophisticated corporations.<BR/><BR/>Somebody has to step in and say, "We're not going to do it - it's just too hard."<BR/><BR/>I think a good litmus test of the mental and moral quality at any large institutions [with significant derivative exposure] would be to ask them, "Do you really understand your derivatives book?" Anyone who says yes is either crazy or lying.<BR/><BR/>It's easy to see [the dangers] when you talk about [what happened with] the energy derivatives - they went kerflooey. When [the companies] reached for the assets that were on their books, the money wasn't there. When it comes to financial assets, we haven't had any such denouement and the accountings hasn't changed so the denouement is ahead of us.<BR/><BR/>Derivatives are full of clauses that say if one party's credit gets downgraded then it has to put up collateral. It's like margin - you can go broke [just putting up more margin]. In an attempt to protect themselves, they've introduced instability. Nobody seems to recognize what a disaster of a system they've created. It's a demented system. <BR/><BR/>In engineering people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting. I'm more pessimistic about this than Warren is."<BR/><BR/><BR/>http://1raindrop.typepad.com/1_raindrop/2008/11/stop-me-if-this-sounds-familiar.htmlAnonymousnoreply@blogger.com