That Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.

That Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.

That Debt-to-GDP chart in the Matterhorn link – while very popular – is also wrong because it double-counts securitized loans as debt. We’re actually at around 250% of GDP – which is WAY too high – but well below the relative Great Depression debt levels. That particular Debt-to-GDP chart starts falling off the wagon around 1980, when securitization was picking up steam. Just a detail to keep in mind.

Pimco’s El-Erian has an especially good track record. His piece is worth reading.

Pimco’s El-Erian has an especially good track record. His piece is worth reading.

Great stuff, SD Transplant. Thanks for sharing the links with us.

From the ZH link, I especially liked this part:

“All of these areas are totally non-productive and the only beneficiaries are the participants in the financial industry. And the rewards have been absolutely astronomical. In investment banking, hedge funds and private equity in particular, the most massive wealth has been created. Many players have become billionaires or created fortunes of tens to hundreds of millions of dollars in the last 10-15 years just by shuffling money around. In the past fortunes were created by building factories and industries. But today any normal employee working in Wall Street or the City in London will, by just showing up to work, make hundreds of thousands to millions of dollars. This is the proof of a world totally out of balance when people dealing in money become the richest segment of society. Since this activity contributes very little to the prosperity of a nation (but very much to its participants) it is not sustainable. The biggest reason why it exists is the massive amount of money that governments have created or printed and the fact that the financial industry has developed into a fractal wealth creation machine for the benefit of its participants.

Great stuff, SD Transplant. Thanks for sharing the links with us.

From the ZH link, I especially liked this part:

“All of these areas are totally non-productive and the only beneficiaries are the participants in the financial industry. And the rewards have been absolutely astronomical. In investment banking, hedge funds and private equity in particular, the most massive wealth has been created. Many players have become billionaires or created fortunes of tens to hundreds of millions of dollars in the last 10-15 years just by shuffling money around. In the past fortunes were created by building factories and industries. But today any normal employee working in Wall Street or the City in London will, by just showing up to work, make hundreds of thousands to millions of dollars. This is the proof of a world totally out of balance when people dealing in money become the richest segment of society. Since this activity contributes very little to the prosperity of a nation (but very much to its participants) it is not sustainable. The biggest reason why it exists is the massive amount of money that governments have created or printed and the fact that the financial industry has developed into a fractal wealth creation machine for the benefit of its participants.