Monday, May 19, 2008

Leveraging and oops

Earlier posts here and on another blog (TE's look at Truth, fiction and finance) suggested that gaming was the basis for a lot of modern finance as people tried to line their pockets, for whatever reason.

This theme will continue along with reviewing all the ways that oops can arise. The Calculated Risk blog provided an overview of leveraging (and tranching - can this be other than sleight-of-hand movement of monies to the bigger pockets, or how do we get something from nothing?) in the context of the recent sub-prime problem. Essentially, leveraging will accentuate movement on either side; if it's positive, then the Streeters (and their others) enjoy big bonuses and maintain their growing distance on the wealth disparity line; if it's negative, then the small guys (usually) lose more relatively than do the bigger pockets.

Except that all this gaming has been the result of Fed foolishness. What happened to the lessons from the 'big crash' with regard to leveraging? So, we have our work cut out for us in regard to the financial shenanigans and related.

On another note, this week Boeing is hosting the world's eyes (both traditional and new, meaning bloggers, of course) in an update of the Dreamliner status. That, no doubt, will spawn off more need to talk about insights, issues, and, especially, the imaginative.

In reference to the Dreamliner program, outsourcing is a type of leverage, especially if expertise is assumed. In terms of that particular program, there were several aspects that will be of continued interest as things unfold, if only for lessons learned.

Remarks:

08/01/2013 -- Ben cannot unwind or taper downhe has too many Doves. We'll have to get back to the king thing (yes, the divine rights of the CEO, new royalty, in other words) and dampening of these types by a new outlook (Magna-Carta'ísh).

03/17/2011 -- Politicos might actually be compounding the issues.

12/18/2008 -- Leveraging, in and of itself, is not bad.

11/01/2008 -- Recently, Boeing announced having obtained insights from analyzing problems with outsourcing. Well, the company has been a success from applying its lessons learned over a number of decades. Here's one for it to consider: Wichita would have been a marvelous grounding asset - in terms of well-founded knowledge about the 787 status, plus more. Oh, of course, letting it go helped line oodles of pockets which would have not have happened if it had been retained within Boeing.

10/26/2008 -- Leveraging is a fairy dust operation, or as Marx would say, fictitious capital creation is the game. We ought to be looking at what has gone wrong, in more ways than being looked at Paulson, Bernanke, and crew.

Modified: 08/01/2013

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