Gambling with Borrowed Chips: The Common Misdiagnosis of the Crisis of 2007–08

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Abbott Press, Feb 14, 2012 - Business & Economics - 176 pages

The United States experienced a meltdown in its financial system that devastated much of the economy in the years 2007 to 2008. In Gambling with Borrowed Chips, author Christopher C. Faille reexamines what is becoming settled wisdom about that financial crisis and the economic troubles that have plagued the country ever since.

In his analysis, Faille challenges what he calls the common misdiagnosis that speculationespecially on the short sidecombined with indebtedness, leverage, deregulation, and greed, produced mayhem. In Gambling with Borrowed Chips, Faille contends that speculation, or gambling, serves valuable functions in an economy. It steers money and other resources to where they can be most of use; it punishes profligacy and rewards foresight; and it disturbs overly cozy arrangements such as those of entrenched corporate managements.

Gambling with Borrowed Chips argues that it is acceptable to gamble, even with borrowed chips. Faille helps us understand the real problem: gambling in a casino that hands out the chips too readily or one that is always eager to manufacture new chips in order to stimulate activity.

 

Selected pages

Contents

Speculators as Parasites
1
From Thomas Aquinas to Henry George
8
Dartmouth to Enron
17
Greenspan and Bernanke
26
First Eight Months
36
Final Four Months
47
Netting Out Derivatives
56
Accounting and Valuation
61
Too Big to Fail
87
Sound Money
97
Efforts at Recovery
107
Collective Bargaining
116
Home Ownership
128
Fuel Prices
137
Final Thoughts
147
Are Equations the Problem?
153

A Hypothesis
71
ECMH Qualifications
77
Copyright

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Gambling With Borrowed Chips: The Common Misdiagnosis of the Crisis of 2007-08
Christopher C. Faille
No preview available - 2012

Common terms and phrases

accounting allowed Amaranth arbitrage artificial assets balance sheet Bear Stearns benefit betting big to fail billion borrowing Bretton Woods bubble capital CDOs central bank chapter chiefly Cioffi commodity contango contract corporate created crisis currency deal debt default defined Delphi derivatives difficult dotcom ECMH economy efficient Enron equity exchange FASB federal funds rate Federal Reserve figure finally finance financial find firm first five going gold Goldman GSEs hard money policy hedge fund housing index funds inefficiency inflation investment investors issue Lehman Brothers lender loans MBIA Merrill Lynch monetary Morgan Stanley mortgage bonds office Official one’s party percent position profit reflect risk role semi—strong share short selling significance Soros specific speculation stock options subprime sufficient trading Treaty of Detroit U.S. dollar unions Wall Street Willumstad

About the author (2012)

Christopher C. Faille, a member of the Connecticut bar since 1982, has written on a variety of financial and legal issues. He was an early reporter with HedgeWorld and is also the coauthor, with David O’Connor, of Basic Economic Principles. He lives in Enfield, Connecticut.

Bibliographic information

TitleGambling with Borrowed Chips: The Common Misdiagnosis of the Crisis of 2007–08
AuthorChristopher C. Faille
PublisherAbbott Press, 2012
ISBN1458201767, 9781458201768
Length176 pages
Subjects › 

Business & Economics / General
  
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