SOS GIGO

This is what Peter Schiff said about the Keynesians eonomists, Garbage In Garbage Out.

Lets talk about the CAR, Capital Adequacy Ratio of the Banks.

Prior to the collapse of the financial crisis, most of the Big Banks in USA is above the CAR. Then suddenly all of them have problems in Sep 2009. Non of the auditors, regulators, rating agencies even raised a red flag of the financial health about the banking or housing sector.

Have anyone stop and think, why, why, why? If one investigate further one will find that there are limitation in the CAR's formula, and I am sure, there is limitation in the rating agencies formula to evaluate the health of the companies and there is even limitation of the formula to evaluate the economy as a whole.

Even US claims to be the most transparent economy in the world, and why didn't we see it? There are Harvard, MITs, Stanford, Harvards, and top notch universities in US, how come non of them sees it?

That is something INVINSIBLE, and everyone seems to overlook it, it is called DERIVATIVES.

It is worth about USD600 trillion, 1000% of world GDP of USD54 trillion. Say, if we tax 1%, it is worth USD6 trillion.