Massima 12/10/2008
PROTECT SAVINGS: HERE IS THE THOUGHT OF ECONOMY - SEE YOU .. From
Economy No. 41, October 8, 2008
If all of us, tomorrow morning, we went together to the door of our bank and we asked to withdraw immediately, in cash, all our money deposited there, what would happen? That bank, which was solid, not be able to settle, without selling securities in which meanwhile has invested our money, but it should be selling lots - many customers to pay - and in so doing would make them fall in price, and we will bring home half of the value stored, so to say.
is the danger here is that the phenomenon disastrous Savvy bankers fear, rightly, that can happen: the "panic selling, sales paroxysmal, those of" every man for himself. " The bank run, as happened in London when it was learned that Northern Rock was about to fail and all depositors rushed to withdraw money at branches, eventually find them closed until the UK Treasury did not intervene to plug the hole with a wagon pounds. Here: those who know the reality of the financial market does not, despite the crisis, this unfortunately can race for cash, and On the other hand, however, now says that it's too late to think about it, that those who try it out today burnt, with heavy losses. What words do not panic now means only harming yourself.
To understand why, just remember a few basic concepts: 1) Time is money, and 2) The price of each good is given by the balance between supply and demand, there is no "true" value at all. Now, we know that this generation of mad scientists of American finance that everyone - including journalists - we have idolized for decades the world has done for a "bubble" of junk bonds, which now has a value of "notional" (ie, nominal, front) amounting to almost 600 trillion, 15 times the GDP of the planet. As if to say that the Italian public debt, amounting to just once a GDP of our country, the comparison is a no brainer. Not only that: while the Italian public debt is for a good 60% of us in the hands of Italian investors (so the government debt is offset by the claim of individuals, with a healthy balance of the economy of the country) U.S. banks sold their junk bonds by the world and made them to buy debt (as in the case of subprime mortgages) that is not against money, but against promises of future payments.
Today, if you have an investor on 15 rivolesse his money back, banks should get out as much money as the global GDP a year. Impossible. If but no one sells, over time even the monstrous disproportion between the real economy and nominal value of outstanding securities will tend to downsize and sell its securities who find new buyers. But with time, which is money.
What should we do then? Stand still, at least here in Europe, in Italy. The percentage, even indirectly, to contamination of our financial system from viruses derivatives Americans is minimal. But be warned: we are all running a very serious risk of impoverishment if, instead of calm down and wait until the storm passes, throwing on the market investors their savings. Perhaps a successful sale, but will be a sellout. Exactly, the panic-selling. If the smartest institutional investor in the world, the American Warren Buffett - a crisis that has seen many - is back in stock to buy, have had some reason. Economy
counter and in the midst of the storm that continues to fall on world stock markets, including New York Stock Exchange 
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what others are afraid.'' According Buffett, and '''neutral''have concerns about the exaggerated 
Sergio Luciano @ sergio.luciano mondadori.it 
