"It's the end of the world as we know it..." (R.E.M.)

I think it is peculiary to see the Man's work falling. It is something you see often, but what we are seeing now is an event of - hopefully - once in a lifetime. It really is scary.
Lehman has filed for Chapter 11, Merrill is now BofA properties. AIG is expected to fall. If that happens all the CDS (credit default swap) which are insuring all the bad-loan based securities which are in the hand of the Fed and of the remaining banks, will be not only worthless, also the banks still holding the poisonous CDOs will get hit severely. And the casualties will increase dramatically. The only solution available to the regulators is to print more money. That will eventually hamper the dollar strength and hit even more dramatically the €/$ exchange rate. That might be helpful for a while: US exports will benefit from such a movement. But if, as it is happening now, the dollar is weakining against the YEN, also all the Japanese manufacturer in the US will suffer, as they will see the absolute value in YEN of dollar earned decrease.
Italy is safe. Banks suffered little, if any, financial damage deriving from subprime write-offs.
As a friend pointed out to me, this crisis might end US supremacy. And some might even rejoice of this. (I don't; I regard the United States of America as my own home.)
If one has read the Esopus fairy-tale about the "wooden-stick king" knows that, in a way, is never a good idea to complain about the status quo when you don't know what is gonna come if you change it. Maybe somebody would prefer to have India or China as the ruling country of the world. I don't.

God Bless Americans, and everybody who lost his job these days and may He grant them safety and peace to all of us.

Will we go back to the Real Economy? Will it be the turning point of our civilization? God knows.
Let's hope.

Last Week Economist contained an interesting dossier regarding the future of Banking.
I will talk about it soon, but later.
Let's focus first on the past of banking.
In the roman civilization to lend goods of any kind against a relevant interest rate was usually considered as thievery, dishonorable and something a member of the Senatus would have never done. Since the italian middle age and especially during the so called "Municipalities Age", an era characterized by significant technological, religious, and cultural advancement during which Italy was composed of small but powerful city-states -, an interesting financial system emerged.
The goods had prices and gold - or gold based local currencies - were still the foundation of richness. A person in need could have gone to the local Monte di Pieta (Fund of Pity), entrust some of its jewlery, endowment, book, and have money in return, forgetting about the problem of interests on debt. Easy - one can say: no inflation, no mismatching maturities, no opportunities cost if capital...
BUT.
Was it an absence of financial markets or an even more modern and contemporary lending and borrowing system than the one we "enjoy" these days?
The jury, together with my opinion, is still out. The only feeling I get is that maybe our system is inevitable in a world where - drammatically - nothing should have an objective value or meaning
in itself and by itself. Or not?

Whys and Whats

This is my first Blog.

I decided to write it primarily for me, so that I can keep track of what I understand and live doing my job.

I studied abroad a lot, and while I work, I am completing my master in finance.

The aim is to discuss news and events from the standpoint of a young catholic man working in finance.

There has been a lot of confusion lately, among catholics, regarding the right attitude towards Capitalism, Free Markets, Financial Markets, liberism vs. communism, market speculation, unfair business conduct etc. and since I developed a little but interesting set of knowledge about these matters I thought it might have been interesting to discuss stuff that happens and comes along my professional path, so that many others can benefit - hopefully.

Communism vanished - or is vanishing - rather quickly in historical terms. Evidence is, though, that nobody on this earth is even an inch nearer to the resolution of the general world mess.

Liberism, capitalism etc, are waaaay overrated. Almost as much as political correctness.

"China is more and more shifting to a free market economy" we hear often in the news - especially in Europe. So what? Go ask the people of Tibet what they think of the advantage that a PRC-regulate Stock market brought to them. None. Some might ask:"Allright... so? that's a civil and human right problem." Yes it is. Where does this rights stem from is my question though.

Truth is, the Market is not gonna make our civilization last longer. And we are running late

These are the first crumbles of what is gonna be this Blog about. Mainly opinions, judgment and reviews that arise from my daily life.

This is anonymous, so I can talk about all the stuff I do on the job that I cannot talk about - it's against my contract. For a start, tomorrow I may start to write the industrial development plan for a firm that we are having a negotiation with, regarding an acquisition.

The margins are VERY high, (for practitioners, we are talking of a Sales/NetProfit ratio of 6.5x) even though the entrepreneurs are everything but plain business people.
They already made the Chairman of the fund walk out of the negotiation room once. We'll see.

See you next time.

P.S. THIS IS NOT AN ATTEMPT TO EXPLAIN NEITHER CATHOLIC SOCIAL DOCTRINE, NOR THE CATHOLIC CHURCH POSITION ON ANY MATTER; IN THE SAME WAY IT IS NOT AN EXPRESSION OF ANY GROUP OF INTEREST. It's just my blog. A catholic financial analyst blog.