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Showing posts from October, 2008

Stream of Consciousness

A phenomenon that happens to me is that as soon as I begin writing something, thoughts, previously unhindered and in constant flux, suddenly come to a silent standstill. The little voice in my head that keeps yapping for hours on end suddenly stops. I guess its to do with knowing that what it is now gonna say is going be read by everyone. That sort of puts a pressure which is enough to make it guarded and cautious. And as soon as I move away from my laptop, or even close my blogger window, there it goes again, about all the random little things I see around me, trying to make sense of it all.

So this post is about experimenting with what I call the 'stream of consciousness', a fancy name for that inner voice. I will keep typing without a pause and will only read the whole post once its done, or when its long enough.

Now that I've described the purpose of this post, now comes the real challenge. To keep typing and keep it at least somewhat interesting. Coherence would be a bo…

In God We Trust - All others must pay cash

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The once amusing quote in the title has now become a poignant summary of the current state of financial affairs.

Everyone now agrees that the present financial crisis was caused by excessive sub-prime lending. But like most phenomenon of significant proportions, its causes were far more numerous, complex and non-linear. I use the term non-linear to describe how each incremental push, insignificant by itself, became a shove and then an irresistible force in the mutually reinforcing presence of other tiny pushes. And its not just that all the effects added up; they magnified each other and then added up.

In earlier times, a borrower's credit-worthiness was judged on two parameters: earning potential and trustworthiness. The innovation of sub-prime lending (which isn't actually new) weakened both these pillars. Earning potential was deemed not to be of too much importance because, as the logic went, the increase in the value of assets (the houses) would enable the borrower to get a…