Sunday, August 13, 2017
Saturday, April 10, 2010
Money and Wealth
I got married recently to a very intelligent person (rare for ladies!) with some background of finance. During our discussion on money matters, she asked me as to why I keep most of my savings invested and not in real hard cash in safe bank account. This blog is an effort to answer this very questions and to relate to money as currency to actual wealth that one possesses.
Lets look at what is wealth and why do we really need it. From financial terms, wealth is capability of an individual to get required necessities from basic items like food to lavish things like weekend in most expensive hotel in Amsterdam. You are more wealthy if you are capable of buying more of those.
For making all the transactions simple, money was invented. (I have already written another blog which details out this part.) But with money, there are a lot of issues that a normal person is not made aware off. Lets look at them one by one.
How real is money? All currency notes mention about guarantee given by governor of central bank that he will pay the holder of the currency so and so amount. But how real is that guarentee? Just look at the currency rates for politically troubled economies and you will be able to answer the question. During Afghanistan war, there was no buyer to the currency Afghani and eventually all transactions moved to US dollars. Only later they released new currency and replaced old afgani with the new one. Again at a discounted rate... Only now as the country is stabilizing, people are steadily moving back from USD.
What about inflation? There is one face to inflation which happens because of increase in demand and since supply takes time to catch up, prices start rising. There are many more reasons for inflation (I can take it up separately). But most important from today's discussion point of view is inflation forced by printing of new currency by central bank. Most of the times new currency is printed only to take care of budget deficit. Second most important is as money gets into rotation, the actual holdings of individuals keep on increasing as for every dollar saved in bank, bank is giving away loans and since people get more money, buyer power is increased forcing rise in inflation.
How safe are banks? I am sure, you all are very well aware of small and big banks failing and issues associated.
So what is the best substitute to hold your wealth? I am not sure of the best substitute. However, gold looks to be a fairly good substitute based on the data available to us for last century. However, if human discovers a planet with gold, we may see price of gold crashing.
Second best substitute I can see is real estate. More suitably the land which is not unlimited. Hence I dont see any major crash in land price (of course, only if you price it properly while buying as it is most illiquid asset)
I am also inclined to investing into businesses through equity route. Although it does not save us from conditions like war, however in today's global economy, we have sufficient number of global organisations who are not much impacted with war in one location.
All said and done, currency is the most liquid asset that you can hold and you cannot buy a loaf of bread by giving peice of land or equity. And for unplanned money requirements, you have to rely on money.
Note: in todays environment money could be currency or plastic or electronic or bank holdings of currency
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I am writing this blog after a long time. I have been little busy with my money earner job and at home to add a sweat member to my family (wife)...
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Lets look at what is wealth and why do we really need it. From financial terms, wealth is capability of an individual to get required necessities from basic items like food to lavish things like weekend in most expensive hotel in Amsterdam. You are more wealthy if you are capable of buying more of those.
For making all the transactions simple, money was invented. (I have already written another blog which details out this part.) But with money, there are a lot of issues that a normal person is not made aware off. Lets look at them one by one.
How real is money? All currency notes mention about guarantee given by governor of central bank that he will pay the holder of the currency so and so amount. But how real is that guarentee? Just look at the currency rates for politically troubled economies and you will be able to answer the question. During Afghanistan war, there was no buyer to the currency Afghani and eventually all transactions moved to US dollars. Only later they released new currency and replaced old afgani with the new one. Again at a discounted rate... Only now as the country is stabilizing, people are steadily moving back from USD.
What about inflation? There is one face to inflation which happens because of increase in demand and since supply takes time to catch up, prices start rising. There are many more reasons for inflation (I can take it up separately). But most important from today's discussion point of view is inflation forced by printing of new currency by central bank. Most of the times new currency is printed only to take care of budget deficit. Second most important is as money gets into rotation, the actual holdings of individuals keep on increasing as for every dollar saved in bank, bank is giving away loans and since people get more money, buyer power is increased forcing rise in inflation.
How safe are banks? I am sure, you all are very well aware of small and big banks failing and issues associated.
So what is the best substitute to hold your wealth? I am not sure of the best substitute. However, gold looks to be a fairly good substitute based on the data available to us for last century. However, if human discovers a planet with gold, we may see price of gold crashing.
Second best substitute I can see is real estate. More suitably the land which is not unlimited. Hence I dont see any major crash in land price (of course, only if you price it properly while buying as it is most illiquid asset)
I am also inclined to investing into businesses through equity route. Although it does not save us from conditions like war, however in today's global economy, we have sufficient number of global organisations who are not much impacted with war in one location.
All said and done, currency is the most liquid asset that you can hold and you cannot buy a loaf of bread by giving peice of land or equity. And for unplanned money requirements, you have to rely on money.
Note: in todays environment money could be currency or plastic or electronic or bank holdings of currency
------------------------------------------------------------------------------------------------
I am writing this blog after a long time. I have been little busy with my money earner job and at home to add a sweat member to my family (wife)...
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Wednesday, July 8, 2009
Traffic problems and one way traffic
In my country, India, traffic is a well known and accepted problem. With the growth in number of vehicles, Of course infrastructure is not able to cope up leading to congestion in most of the roads in the urban area.
One of the quickest solution applied by the authorities is to create one way traffic on most of the congestion prone junctions. This of course solves the problem when there are only few junctions with traffic problem and when a city has limited one ways. If the number of one ways are increased beyond a limit, the solution back fires with increased traffic conditions rather than smooth traffic.
Traffic is directly proportionate to number of vehicles are present at a particular point in time. if there is a particular bottleneck with of movement of 1 car a second where there are 2 cars coming e ery second, we will have an increased traffic. as every other car will have to wait every second. And very soon there will be a huge queue of cars. If 3 cars want to pass every second, the traffic will be twice as high for case of 2 cars. and Nth car will need N seconds to cross the bottleneck.
After a while, the queue will become so long that some other alternate route (typically longer with less traffic) will become more attractive than this bottleneck and some adventurous drivers will start exploring this alternative. With this diversion, with time, the traffic situation may get to an equilibrium.
Of course, this is an ideal case and there will be many realistic cases possible because the drivers may try out multiple ways to go ahead of others which may actually end up in some sort of deadlock.
Now lets talk about a complete city, lets say there is total of X of road lanes in the city. Length of a car is Y meters. and there are Z number of cars on the road at a particular time. As long as X is way too high compared to Y*Z, there should not be major traffic. Now lets say there are few bottlenecks and to solve problems around the bottlenecks one way traffic is implemented by autorities. Since now amount of travel every car needs to do incfreases, there is a risk that every car is going to stay on the road for longer time thereby increasing number of vehicles on the road at a particular time. (Assumed that cars are on the road only during the travel. otherwise they are parked outside the road). And there will be a threshold after which the time on the road increases so much that the solution back fires.
After talking about traffic, now let us try realating it to business and economy...
Consider every car to be an individual who wants to travel some distance to reach financial goals. To reach these goals he invests his savings and is trying to make it grow. External situation right from rains, tornados to government policies to frauds done by industrialists will create bottlenecks for this individual to move towards his goals. Just as in traffic bottleneck, as soon as he knows that a particular way may take longer than another long but fast way, he will start shifting his/her investments. the only difference here is that everyone gets information at differnet time from different sources analysed differently, hence there is complete caos.
To manage all these and to provide benefits to those who are not well to do, all the governments have different rules for different groups of individuals like different income tax rules, unequal priorities etc. These things work only till the time these rules and policies are fairly limited to total number of people otherwise, it may create bigger problems than solving problems at hand.
One of the quickest solution applied by the authorities is to create one way traffic on most of the congestion prone junctions. This of course solves the problem when there are only few junctions with traffic problem and when a city has limited one ways. If the number of one ways are increased beyond a limit, the solution back fires with increased traffic conditions rather than smooth traffic.
Traffic is directly proportionate to number of vehicles are present at a particular point in time. if there is a particular bottleneck with of movement of 1 car a second where there are 2 cars coming e ery second, we will have an increased traffic. as every other car will have to wait every second. And very soon there will be a huge queue of cars. If 3 cars want to pass every second, the traffic will be twice as high for case of 2 cars. and Nth car will need N seconds to cross the bottleneck.
After a while, the queue will become so long that some other alternate route (typically longer with less traffic) will become more attractive than this bottleneck and some adventurous drivers will start exploring this alternative. With this diversion, with time, the traffic situation may get to an equilibrium.
Of course, this is an ideal case and there will be many realistic cases possible because the drivers may try out multiple ways to go ahead of others which may actually end up in some sort of deadlock.
Now lets talk about a complete city, lets say there is total of X of road lanes in the city. Length of a car is Y meters. and there are Z number of cars on the road at a particular time. As long as X is way too high compared to Y*Z, there should not be major traffic. Now lets say there are few bottlenecks and to solve problems around the bottlenecks one way traffic is implemented by autorities. Since now amount of travel every car needs to do incfreases, there is a risk that every car is going to stay on the road for longer time thereby increasing number of vehicles on the road at a particular time. (Assumed that cars are on the road only during the travel. otherwise they are parked outside the road). And there will be a threshold after which the time on the road increases so much that the solution back fires.
After talking about traffic, now let us try realating it to business and economy...
Consider every car to be an individual who wants to travel some distance to reach financial goals. To reach these goals he invests his savings and is trying to make it grow. External situation right from rains, tornados to government policies to frauds done by industrialists will create bottlenecks for this individual to move towards his goals. Just as in traffic bottleneck, as soon as he knows that a particular way may take longer than another long but fast way, he will start shifting his/her investments. the only difference here is that everyone gets information at differnet time from different sources analysed differently, hence there is complete caos.
To manage all these and to provide benefits to those who are not well to do, all the governments have different rules for different groups of individuals like different income tax rules, unequal priorities etc. These things work only till the time these rules and policies are fairly limited to total number of people otherwise, it may create bigger problems than solving problems at hand.
Tuesday, June 30, 2009
Price Vs Cost Vs Quality
Definitions
Price in economics and business is the result of an exchange and from that trade we assign a numerical monetary value to a good, service or asset.
In economics, business, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore.
Quality in business, engineering and manufacturing has a pragmatic interpretation as the non-inferiority or superiority of something. Quality is a perceptual, conditional and somewhat subjective attribute and may be understood differently by different people.
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Couple of days back I went to a restaurant where menu card had prices which were at least 10 times the price on other restaurants. At least thrice the cost of a good five star restaurant. And even then, this restaurant was packed with a huge queue. In this time of recession, there still people exist who are willing to pay such high prices for a commodity equivalent!!!
Even when you see the goods produced in China, the quality is not all that bad for the price those goods are offered. Then why does a human still goes for more expensive stuff?
If I produce something, all the expenses that I incur are added to get my cost of production. Price is the value at which I sell the produced good. In other words, for a buyer, price is the amount I am ready to pay for a particular good or service. This story is complete only when I bring quality in the loop.
When I buy a toilet cleaner, I pay for the perceived cleanliness that this cleaner will bring to my toilet. When I buy burger, I pay for fulfilling hunger that I may have. or just for the fact that I like the taste of a particular burger.
Lets take a little complicated item - car. The cost of manufacture of a typical car including cost of R&D etc. would be around USD 5,000. There are cars for sale right from this price of USD 5,000 to USD 100,000. Why would someone pay 20 times for a car when his/her basic need of travel is satisfied by paying so little. To make things complicated, these rich people would never drive their own car - so it may not be for driving fun. They would have a home-office which makes them travel very little and when travelling, most of their travel happens in the air!!! So is it only for the status that they get by buying such an expensive piece of machinery?
For the manufacturer,
profit = ( price - cost ) * number of goods sold
And to maximise my profits, I need to either increase price and to have customers buy at that price by improving perceived quality of my goods, or reduce my cost without reduction in perceived quality of my finished good. Or increase number of goods sold. Number of goods sold is directly proportional to the difference in the perceived quality by the customers and my list-price.
Now the only question is How to quantify quality? ... Such a simple question. but unanswered in most of the textbooks...
Tuesday, April 7, 2009
Correction and War
I am no expert in predicting future. However, few thoughts about future which don't let me sleep well at night....
I am writing this blog when worldover equity markets are stabalising or even moved up by 10 - 50% from the lows. Economy in most of the regions is picking up. Although everything looks to be good around, I have fair amount of doubt that the real situation could be worse than what it seems.
In 1930's we have witnessed a great depression. Most of the experts say it was not as bad as this correction. Economy came out of that one only after the second world war.
Experts say that this correction is near over and now things will be good going forward. However I have resons to belive otherwise. If governments infuse trillions of dollers in the economy, at some point in time, it will start showing signs of return to normalcy. But is it really tending to be normal in longer term? Sooner or later the governments will have to get back the money that they have invested in economy. Governments earn by way of taxes or by way of privetising government owned entities, or by creating wealth by government owned entities. If governments are not able to raise enough funds they will have to print new money. Let me look at each on of these with respect to what is happening in the economy.
Taxes - When economy is growing, everyone is earning more and more, economy has faster rotation of money. And for every interchange, government gets taxes. For everyone getting salary or for every soap sold, government gets small % of money as taxes. But with the economy in correction, the speed of rotation of money is reduced substantially. People are loosing jobs, their salaries are getting reduced. Companies are making losses. In such case where are the people and companies who would pay taxes to the governments?
In terms of privatisation, most of the govenments around the globe have already privatised most of the businesses that they used to control including banking, electricity generation and distribution etc. However, there is a small little scope of privatisation, where are the people interested in purchasing those?
Lastly, about generating money from government owned businesses. The most profit making business for governments at this time, is only defence materials (warheads, warcrafts, Nuclear technologies for war etc.) Which does extreamly good during the time of war.
Now let me get to the way people think. People come into groups (country, locality, society) because they get benefitted by being in groups. And all the groups want to make most for the people they represent. And that is where fights, wars between the groups happen.... In todays scenario, we already have governments making statements like providing jobs only to their nationals and forcing reduce outsourcing. We already have governments fighting over natural resources like Oil....
In my opinion, in medium term, things are going to be more and more difficult for the economy which is going to lead to a large scale war (if not world war). And only then economies worldwide are going to come back to normal....
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
All the information used here is from general information from newspapers and different articles and I have no insider information nor connections to any government politics. The information available with me may not be correct or misguiding, reader discretion is requested.
I am writing this blog when worldover equity markets are stabalising or even moved up by 10 - 50% from the lows. Economy in most of the regions is picking up. Although everything looks to be good around, I have fair amount of doubt that the real situation could be worse than what it seems.
In 1930's we have witnessed a great depression. Most of the experts say it was not as bad as this correction. Economy came out of that one only after the second world war.
Experts say that this correction is near over and now things will be good going forward. However I have resons to belive otherwise. If governments infuse trillions of dollers in the economy, at some point in time, it will start showing signs of return to normalcy. But is it really tending to be normal in longer term? Sooner or later the governments will have to get back the money that they have invested in economy. Governments earn by way of taxes or by way of privetising government owned entities, or by creating wealth by government owned entities. If governments are not able to raise enough funds they will have to print new money. Let me look at each on of these with respect to what is happening in the economy.
Taxes - When economy is growing, everyone is earning more and more, economy has faster rotation of money. And for every interchange, government gets taxes. For everyone getting salary or for every soap sold, government gets small % of money as taxes. But with the economy in correction, the speed of rotation of money is reduced substantially. People are loosing jobs, their salaries are getting reduced. Companies are making losses. In such case where are the people and companies who would pay taxes to the governments?
In terms of privatisation, most of the govenments around the globe have already privatised most of the businesses that they used to control including banking, electricity generation and distribution etc. However, there is a small little scope of privatisation, where are the people interested in purchasing those?
Lastly, about generating money from government owned businesses. The most profit making business for governments at this time, is only defence materials (warheads, warcrafts, Nuclear technologies for war etc.) Which does extreamly good during the time of war.
Now let me get to the way people think. People come into groups (country, locality, society) because they get benefitted by being in groups. And all the groups want to make most for the people they represent. And that is where fights, wars between the groups happen.... In todays scenario, we already have governments making statements like providing jobs only to their nationals and forcing reduce outsourcing. We already have governments fighting over natural resources like Oil....
In my opinion, in medium term, things are going to be more and more difficult for the economy which is going to lead to a large scale war (if not world war). And only then economies worldwide are going to come back to normal....
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
All the information used here is from general information from newspapers and different articles and I have no insider information nor connections to any government politics. The information available with me may not be correct or misguiding, reader discretion is requested.
Correction and Insurance
We all know that in this recession most of the large insurance companies had to be bailed out by government. I am trying to find reasons of they going so bad and government who is acting so strict with other industries being nice to insurance companies....
Why do we all buy insurance? To safeguard ourselves from the risks. If I die tomorrow, i want my kids to be taken care of. If I have an accident, I want to be taken care of. If I loose my house in storm, I want money buy a new one and so on and so forth...
How do insurance companies make money? Since all the people buying insurance do not have tragedies at the same time, Insurance company can pay off the people in problem by money taken from others. They of course do need to make profits to pay salaries of the agents and managers...
Now, the premium is calculated based on perceived risks. Risks are based on Past information and data. Now before this correction, we did not have any information or data to calculate premiums effectively for all the insurances that these companies had provided.
Secondly, all these insurance companies were insuring banks and other businesses for unnecessary risks that they were taking. In a booming market, more the risks you take more the rewards. And all your risks are hedged by paying small premium to insurance companies and when you are faced with negative consequences, you go back to Insurance companies.
Thirdly, and more importantly, Insurance companies pay agents based on number of policies sold. So more the risk agents makes you take, more money you pay them and in a booming economy where quarterly results are of utmost importance, you end up taking more and more risks at premiums which may not be justified. And still you take risks just to please your investors...
Now, with the snowball effect in real estate which entered other markets swiftly, insurance companies were forced to pay too much which made them unsustainable. And if the government would not have bailed these insurance companies, there would have been catastrophic disaster in financial sector...
Everyone who would have taken risks on insurance would have immediately sold of everything to reduce the risks and whole economy would have been shattered...
Even those with health insurance would have been denied basic healthcare and by law of land, basic health is responsibility of the government and then, the treasury would not have been able to meet even most basic healthcare requirements...
Why do we all buy insurance? To safeguard ourselves from the risks. If I die tomorrow, i want my kids to be taken care of. If I have an accident, I want to be taken care of. If I loose my house in storm, I want money buy a new one and so on and so forth...
How do insurance companies make money? Since all the people buying insurance do not have tragedies at the same time, Insurance company can pay off the people in problem by money taken from others. They of course do need to make profits to pay salaries of the agents and managers...
Now, the premium is calculated based on perceived risks. Risks are based on Past information and data. Now before this correction, we did not have any information or data to calculate premiums effectively for all the insurances that these companies had provided.
Secondly, all these insurance companies were insuring banks and other businesses for unnecessary risks that they were taking. In a booming market, more the risks you take more the rewards. And all your risks are hedged by paying small premium to insurance companies and when you are faced with negative consequences, you go back to Insurance companies.
Thirdly, and more importantly, Insurance companies pay agents based on number of policies sold. So more the risk agents makes you take, more money you pay them and in a booming economy where quarterly results are of utmost importance, you end up taking more and more risks at premiums which may not be justified. And still you take risks just to please your investors...
Now, with the snowball effect in real estate which entered other markets swiftly, insurance companies were forced to pay too much which made them unsustainable. And if the government would not have bailed these insurance companies, there would have been catastrophic disaster in financial sector...
Everyone who would have taken risks on insurance would have immediately sold of everything to reduce the risks and whole economy would have been shattered...
Even those with health insurance would have been denied basic healthcare and by law of land, basic health is responsibility of the government and then, the treasury would not have been able to meet even most basic healthcare requirements...
Monday, March 30, 2009
Correction and Real estate
We all know that the current correction started in the real estate market. Let us try to see why real estate makes the best place.
Real estate is much different than current money markets that we know. No two estates are the same. Even the two adjoining plots or apartments one above the other with exact specification are not identical. Their specifications always differ. Secondly, how ever matured the real estate market becomes, we can never be able to do as good price discovery as that for lets say stock market as the amount of transactions are way too less and discrete. Thirdly, rather than price being discovered through a auctioning process, it is mo decided by the agent as for all the limitations we have, we are (buyer and seller) dependent on the agent to help us with pricing. And most importantly, the agent is not doing trade in either buyers nor sellers benefit, but to his own. And earlier the transaction is triggered, earlier he will get his charges.
Last and probably the most important difference is that the underlining asset is something that we may not be able to part with. Lets say I own Citibank stock and the stock starts going down or up, I take a decision to sell it and the whole transaction can be done in less than a second. But if you replace stock with my home, I may be limited with all the restrictions like where to sleep if I sell it today. At least 50-60 % of the real estate properties are being used directly as against liquid assets like stocks. and that includes the open farm lands...
So what happens is that the real estate market reacts to news slower. Secondly, because it reacts to news slower, people believe that it does not react to news at all.
Now lets see why this correction actually started. With newer laws like SoX etc. in place, US government thought nothing could go wrong with the financial institutions. Actually even the financial institution heads thought that nothing can go wrong with their institutions.
We thought having closer data points is enough to do a good quality risk management. banks at a point in time were 16 times leveraged on the price of the real estate. In simple words if a real etate is worth 100,000.00 USD, then a bank would have given away loan worth of about USD 1,600,000.00 against it. I am not going to cover why this actually happened. But the fact of the matter is that the banks thought if they can track the prices and the paying capacity of the owner, they are better off.
Secondly, there were a lot of speculators who came in becasue of it. Now, if I can get whole of the real estate free (without investing a penny) and that the real estate prices are going up by more than 25% every annum, I would just need to go and buy... all I am asked is my salary slip!!!
Now, some intelligent investor starts selling all the real estate he has and as real eastate reacts to the news very slow, he has ample time to get off all the property he owns. And by the time it starts showing, others will also start following him.
Now those who are over leaveraged to make a quick buck cannot hold on to their losses, and the bank auctions his property at much lower rates. All the intelligent people in bank do not understand that they are doing bad for themselves while auctioning the property. Even a eight standard kid can tell you that if you auction a property at half the price, all properties nearby are going to go down by half. And if their prices go down, bank will have more and more defaulters. And that is where the spiralling effect starts!!!
Some intelligent people in banks did have insurance cover for the risks they were taking. Lets discuss insurance companies and correction in next post...
Real estate is much different than current money markets that we know. No two estates are the same. Even the two adjoining plots or apartments one above the other with exact specification are not identical. Their specifications always differ. Secondly, how ever matured the real estate market becomes, we can never be able to do as good price discovery as that for lets say stock market as the amount of transactions are way too less and discrete. Thirdly, rather than price being discovered through a auctioning process, it is mo decided by the agent as for all the limitations we have, we are (buyer and seller) dependent on the agent to help us with pricing. And most importantly, the agent is not doing trade in either buyers nor sellers benefit, but to his own. And earlier the transaction is triggered, earlier he will get his charges.
Last and probably the most important difference is that the underlining asset is something that we may not be able to part with. Lets say I own Citibank stock and the stock starts going down or up, I take a decision to sell it and the whole transaction can be done in less than a second. But if you replace stock with my home, I may be limited with all the restrictions like where to sleep if I sell it today. At least 50-60 % of the real estate properties are being used directly as against liquid assets like stocks. and that includes the open farm lands...
So what happens is that the real estate market reacts to news slower. Secondly, because it reacts to news slower, people believe that it does not react to news at all.
Now lets see why this correction actually started. With newer laws like SoX etc. in place, US government thought nothing could go wrong with the financial institutions. Actually even the financial institution heads thought that nothing can go wrong with their institutions.
We thought having closer data points is enough to do a good quality risk management. banks at a point in time were 16 times leveraged on the price of the real estate. In simple words if a real etate is worth 100,000.00 USD, then a bank would have given away loan worth of about USD 1,600,000.00 against it. I am not going to cover why this actually happened. But the fact of the matter is that the banks thought if they can track the prices and the paying capacity of the owner, they are better off.
Secondly, there were a lot of speculators who came in becasue of it. Now, if I can get whole of the real estate free (without investing a penny) and that the real estate prices are going up by more than 25% every annum, I would just need to go and buy... all I am asked is my salary slip!!!
Now, some intelligent investor starts selling all the real estate he has and as real eastate reacts to the news very slow, he has ample time to get off all the property he owns. And by the time it starts showing, others will also start following him.
Now those who are over leaveraged to make a quick buck cannot hold on to their losses, and the bank auctions his property at much lower rates. All the intelligent people in bank do not understand that they are doing bad for themselves while auctioning the property. Even a eight standard kid can tell you that if you auction a property at half the price, all properties nearby are going to go down by half. And if their prices go down, bank will have more and more defaulters. And that is where the spiralling effect starts!!!
Some intelligent people in banks did have insurance cover for the risks they were taking. Lets discuss insurance companies and correction in next post...
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