Bathing in Bubbly
Here's a panel from a comic I did earlier this year.
At the time, it was a humorous exaggeration of how Bank CEOs live. But the news of the decadent retreat by bailed-out AIG execs has rendered it true. The spa they went to had an option on the menu to bathe in white wine while drinking wine for $665. When I drew the comic I considered noting that the guy was bathing in champagne but the the panel was already crowded and it seemed too excessive...
At the time, it was a humorous exaggeration of how Bank CEOs live. But the news of the decadent retreat by bailed-out AIG execs has rendered it true. The spa they went to had an option on the menu to bathe in white wine while drinking wine for $665. When I drew the comic I considered noting that the guy was bathing in champagne but the the panel was already crowded and it seemed too excessive...
posted by Matt Bors at
1:36 PM
3 Comments:
The animated snap looks so funny. And it's really the better way to describe about Bank CEOs. After seeing this analysis, we can guess who is responsible for the global financial crisis.
Henry Braun
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Henry Braun, guess all you want. But it's common sense that Capital markets operate on the basic premise of risk versus reward.
Investors taking a risk on stocks expect a higher rate of return than do investors in risk-free Treasury bills, Guaranteed Investment Certificates, etc. which are backed by the full faith and credit of the issuing country or institution.
The same goes for loans.
Allegedly less creditworthy subprime borrowers represent a riskier investment, so lenders will charge them a higher interest rate than they would charge a prime borrower for the same loan.
Throw in the fact that they cant even pay these loans to begin with, the greed that there is on Wall St. and the goverment forcing banks to lend this money - and you have your blame for crisis, it's all of them.
Half of ARM borrowers qualified for better loans but were mislead. Banks pooled these risky loans into complex financial intruments that were able to get AAA ratings...this isn't basic risk versus reward--there was rank corruption in the system.
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