Today is a better day, the sun is shining and all is well.  Though I can’t say the same about the current world economy.  My main hobby, if you can call it that, is trading.  I trade index options on the FTSE.  From 1999 through to 2006 I taught trading of one sort or another for a couple of firms.  I don’t do that any more but I still trade on my own account.  As part of that I spend several hours per week reading various reports and of course I watch the US and UK markets on a daily basis.

I suppose I could be called a Bear.  I have been warning of the current situation for several years. ( I was at least 4 years too early).  But to me it was obvious that selling mortgages to people whose only criteria was that they were breathing, was a recipe for disaster.

There was a paper I read some time back that discussed “the fingers of instability” saying if you keep adding a grain of sand at a time to a pile, sooner of later just one grain more will start a landslide.

So when we look back, what started the landslide? It was the sub-prime mortgage derivatives - where banks took many mortgages, put them all together and then sliced and diced them into different traunches which were then insured and sold as excellent investments to other financial institutions.  But to my way of thinking then, “once a dog always a dog” has proved to be correct.