Pinching pennies or pitching pennies – when one has limited or no income - what is most advisable for one to do? Penny-Ante Poker (a poker game in which the highest bet is limited to a penny or another small sum) – who raised the stakes? When did it suddenly become “Trillion-Ante” poker? In a bygone day, when everyone seemed to be poor and money-values were conscience-driven, such as – “Waste not – Want not!” (it became a mantra of that day)– but even then, children would gather in the school yard and Pitch Pennies (the one whose penny came closest to the wall won all the other pennies that had been thrown). How did the value system in this nation become derailed? Why are so many losing their life’s investments and homes? Is there a Financial Grinch lurking out there waiting to beguile and bankrupt whoever - - whenever?
Today - Monday, May 10, 2010 in the Washington Times, a Business Headline appears: “DEBORCHGRAVE: Stock market time bomb?” The sub-title to the article is: “Derivatives crash could blow up the global economy.” The problem is summed up in these words: “One of the Middle East's most powerful bankers conceded recently that even after listening to experts explain the drill, he still does not understand derivatives and therefore doesn't trust them and won't have anything to do with them. And when that weapon of mass destruction (WMD) explodes, he explained, our bank's customers, from all over the world, will be saved from the disaster." In other words, he is saying that the “Financial-Experts” cannot define what they are doing. It is comparable to rolling “loaded” dice (stated to be the WMD = Weapon of Mass Destruction in the Financial World) in both an undisciplined and irresponsible way – risking investor’s money without conscience or regard to the outcome. The article states: “Even the world's most savvy stock-market giants (such as Warren E. Buffett) have warned over the past decade that derivatives are the fiscal equivalent of a weapon of mass destruction (WMD) - potentially lethal. And the consequences of such an explosion would make the recent global financial and economic crisis seem like penny ante. But generously lubricated lobbyists for the unrestricted, unsupervised derivatives markets tell congressional committees and government regulators stay out of their business.
While banks all over the world were imploding and some $50 trillion vanished in global stock markets, the derivatives market grew by an estimated 65 percent, according the Bank for International Settlements (they convene the world's 57 most powerful central bankers in Basel, Switzerland, for periodic secret meetings). Occasionally, they issue a cry of alarm. This time, derivatives had soared from $414.8 trillion at the end of 2006 to $683.7 trillion in mid-2008 - 18 months' time. The derivatives market is now estimated at $700 trillion (face value, not market value). The world's gross domestic product in 2009: $69.8 trillion; America's, $14.2 trillion. The total market cap of all major global stock markets? A mere $30 trillion. And the total amount of dollar bills in circulation, most of them abroad: $830 billion. What's so difficult to understand about derivatives? Essentially, they are bets for or against the house - red or black at the roulette wheel….Credit derivatives are based on loans, bonds or other forms of credit. Over-the-counter (OTC) derivatives are contracts that are traded and privately negotiated directly between two parties, All of this…unregulated…” For further explanation see http://www.washingtontimes.com/news/2010/may/10/stock-market-time-bomb/.
Proverbs 24:3-4 (The Message) states: “It takes wisdom to build a house, and understanding to set it on a firm foundation; It takes knowledge to furnish its rooms with fine furniture and beautiful draperies.” In the NLT: “A house is built by wisdom and becomes strong through good sense. Through knowledge its rooms are filled with all sorts of precious riches and valuables.” Careful financial management will always have a positive result. Rolling Load Dice will always be lethal – especially if it is being done by those who can’t define what they are doing! Benjamin Franklin was correct – “A Penny saved is a Penny earned.” Don’t use your “Penny” recklessly or with abandon. Don’t take unwise short-cuts. Penny-ante poker and pitching pennies against the wall will take what little you had and leave you with nothing. Don’t take unnecessary financial risks. Be wise and you will also be rewarded. Consider these things with me!
Today - Monday, May 10, 2010 in the Washington Times, a Business Headline appears: “DEBORCHGRAVE: Stock market time bomb?” The sub-title to the article is: “Derivatives crash could blow up the global economy.” The problem is summed up in these words: “One of the Middle East's most powerful bankers conceded recently that even after listening to experts explain the drill, he still does not understand derivatives and therefore doesn't trust them and won't have anything to do with them. And when that weapon of mass destruction (WMD) explodes, he explained, our bank's customers, from all over the world, will be saved from the disaster." In other words, he is saying that the “Financial-Experts” cannot define what they are doing. It is comparable to rolling “loaded” dice (stated to be the WMD = Weapon of Mass Destruction in the Financial World) in both an undisciplined and irresponsible way – risking investor’s money without conscience or regard to the outcome. The article states: “Even the world's most savvy stock-market giants (such as Warren E. Buffett) have warned over the past decade that derivatives are the fiscal equivalent of a weapon of mass destruction (WMD) - potentially lethal. And the consequences of such an explosion would make the recent global financial and economic crisis seem like penny ante. But generously lubricated lobbyists for the unrestricted, unsupervised derivatives markets tell congressional committees and government regulators stay out of their business.
While banks all over the world were imploding and some $50 trillion vanished in global stock markets, the derivatives market grew by an estimated 65 percent, according the Bank for International Settlements (they convene the world's 57 most powerful central bankers in Basel, Switzerland, for periodic secret meetings). Occasionally, they issue a cry of alarm. This time, derivatives had soared from $414.8 trillion at the end of 2006 to $683.7 trillion in mid-2008 - 18 months' time. The derivatives market is now estimated at $700 trillion (face value, not market value). The world's gross domestic product in 2009: $69.8 trillion; America's, $14.2 trillion. The total market cap of all major global stock markets? A mere $30 trillion. And the total amount of dollar bills in circulation, most of them abroad: $830 billion. What's so difficult to understand about derivatives? Essentially, they are bets for or against the house - red or black at the roulette wheel….Credit derivatives are based on loans, bonds or other forms of credit. Over-the-counter (OTC) derivatives are contracts that are traded and privately negotiated directly between two parties, All of this…unregulated…” For further explanation see http://www.washingtontimes.com/news/2010/may/10/stock-market-time-bomb/.
Proverbs 24:3-4 (The Message) states: “It takes wisdom to build a house, and understanding to set it on a firm foundation; It takes knowledge to furnish its rooms with fine furniture and beautiful draperies.” In the NLT: “A house is built by wisdom and becomes strong through good sense. Through knowledge its rooms are filled with all sorts of precious riches and valuables.” Careful financial management will always have a positive result. Rolling Load Dice will always be lethal – especially if it is being done by those who can’t define what they are doing! Benjamin Franklin was correct – “A Penny saved is a Penny earned.” Don’t use your “Penny” recklessly or with abandon. Don’t take unwise short-cuts. Penny-ante poker and pitching pennies against the wall will take what little you had and leave you with nothing. Don’t take unnecessary financial risks. Be wise and you will also be rewarded. Consider these things with me!
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