Monday, December 15, 2008

financial musings

I really find little of what is being reported about this Madoff guy or his scheme very credible right now. Never has so much news been written with so little hard information. I don't think anybody knows much of anything right now on the scale of what this guy had going on, or how he was able to do it, or just about anything. But how big is $50 billion dollars? The entire gross regional product (think of GDP, but at a local level) of the entire Pittsburgh region is about $110 billion annually. So this guy supposedly defrauded people out of almost half the entire output of all of us for the year. or put another way, all 2.5 million or so of us toiled away for say 5 months just to have it frittered away by this one guy.

What has me wondering...... I have not seen any stories to suggest there is, but are there really no Pittsburgh connections here at all? That would be good, but it seems a bit improbable.

Just on the general topic of financial pathologies... My favorite financial columnist Joe Mysak over at Bloomberg has a comment on how some investment banks are now advising clients to buy credit default swaps on some state governments. Pretty much betting that state governments will go bankrupt and default on their bonds. I'll let him explain how pathological that is given the firms' other business with states... but I really have been wondering if there are any credit default swaps out there on any City of Pittsburgh debt? I have found nothing to say there is. Anyone know if such a contract is out there?


Anonymous MH said...

I don't think I have enough real money to get an account with whoever sells credit default swaps. But, maybe I can make a bet on government default on Inkling. I just won $4,200, so I'm looking for new bets. I was going to bet on Blago, but he just seems too unpredictable.

Monday, December 15, 2008 9:02:00 PM  

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